Plan production for the next year. The demand forecast is spring, 20,200; summer
ID: 370436 • Letter: P
Question
Plan production for the next year. The demand forecast is spring, 20,200; summer, 10,800; fall, 14,600; winter, 18,000. At the beginning of spring you have 66 workers and 1,010 units in inventory. The union contract specifies that you may lay off workers only once a year, at the beginning of summer. Also, you may hire new workers only at the end of summer to begin regular work in the fall. The number of workers laid off at the beginning of summer and the number hired at the end of summer should result in planned production levels for summer and fall that equal the demand forecasts for summer and fall, respectively. If demand exceeds supply, use overtime in spring only, which means that backorders could occur in winter. You are given these costs: hiring, $90 per new worker; layoff, $180 per worker laid off; holding, $19 per unit-quarter; backorder cost, $11 per unit; straight-time labor, $11 per hour; overtime, $17 per hour. Productivity is 0.5 unit per worker hour, eight hours per day, 50 days per quarter.
Find the total cost of this plan. Note: Hiring expense occurs at beginning of Fall. (Leave no cells blank - be certain to enter "0" wherever required.)
Plan production for the next year. The demand forecast is spring, 20,200; summer, 10,800; fall, 14,600; winter, 18,000. At the beginning of spring you have 66 workers and 1,010 units in inventory. The union contract specifies that you may lay off workers only once a year, at the beginning of summer. Also, you may hire new workers only at the end of summer to begin regular work in the fall. The number of workers laid off at the beginning of summer and the number hired at the end of summer should result in planned production levels for summer and fall that equal the demand forecasts for summer and fall, respectively. If demand exceeds supply, use overtime in spring only, which means that backorders could occur in winter. You are given these costs: hiring, $90 per new worker; layoff, $180 per worker laid off; holding, $19 per unit-quarter; backorder cost, $11 per unit; straight-time labor, $11 per hour; overtime, $17 per hour. Productivity is 0.5 unit per worker hour, eight hours per day, 50 days per quarter.
Forecast 20,200 10,800 14,600 18,000 Beginning inventory Production required Production hours required Regular workforce Regular production Overtime hours Overtime production Total production Ending inventory Ending backorders Workers hired Workers laid off Spring Summer Fall Winter Straight time $ $ $ $ Overtime Inventory Backorder Hiring Layoff Total $ $ $ $ Total cost $Explanation / Answer
OT Lay Spring Summer Fall Winter Forecast 20200 10800 14600 18000 Beginning Inv 1010 0 2000 200 Prod Req 19190 10800 14600 17800 Hours per unit 2 Prod Hour Req 38380 21600 29200 35600 8 50 66 Prod Hour Available Reg 26400 25600 25600 25600 Daily Hours Days avail Starting Workforce Overtime hours 11980 0 0 0 Temp workers 0 0 0 0 Temp workers hours Available 0 0 0 0 Summer fall Total hours Available 38380 25600 25600 25600 Total req Man power Actual prod 19190 12800 12800 12800 25400 63.5 Ending Inv 0 2000 200 -5000 64 Workers Hired 0 0 0 0 Workerd Laid off 0 2 0 0 Back order 0 0 0 5000 11 Strait time 290400 281600 281600 281600 17 Overtime 203660 0 0 0 19 Inventory 0 38000 3800 0 11 Back order 0 0 0 55000 90 Hiring 0 0 0 0 180 lay off 0 360 0 0 Total 494060 319960 285400 336600 Annual cost 1436020