Cost data Regular-time labor cost per hour $10.00 Overtime labor cost per hour $
ID: 370618 • Letter: C
Question
Cost data
Regular-time labor cost per hour $10.00
Overtime labor cost per hour $15.00
Subcontracting cost per unit (labor only) $84.00
Holding cost per unit per period $10.00
Back-order cost per unit per period $20.00
Hiring cost per employee $600.00
Firing cost per employee $450.00
Capacity data
Beginning workforce 210 employees
Beginning inventory 400 units
Labor standard per unit 6 hours
Regular time available per period 160 hours
Overtime available per period 32 hours
Subcontracting maximum per period 1000 units
Subcontracting minimum per period 500 units
Demand data
Period 1 6000 units
Period 2 4800 units
Period 3 7840 units
Period 4 5200 units
Period 5 6560 units
Period 6 3600 units
5) Jill Nicholas is concerned about BackPack’s corporate image and has decided against using hires and fires. Instead, she has asked you to consider a chase aggregate plan using the current workforce supplemented by either overtime or undertime to change capacity to match demand exactly. She has asked for the following information from you:
(a) How many production hours would be required each period to produce the exact quantity needed?
(b) How many regular-time production hours are available each period?
(c) How many overtime production hours would be needed each period?
(d) Show what would happen if this plan were implemented.
(e) Calculate the costs associated with this plan.
(f) Evaluate the plan in terms of cost, customer service, operations, and human resources.
Explanation / Answer
Ans D is the whole exercise:
Theoretical The Beginning inv can be negative P1 P2 P3 P4 P5 P6 Forecast 6000 4800 7840 5200 6560 3600 Beginning Inv 400 0 800 -320 80 0 Hours/unit Prod Req 5600 4800 7040 5520 6480 3600 6 Prod Hour Req 33600 28800 42240 33120 38880 21600 8 20 210 Prod Hour Available 33600 33600 33600 33600 33600 21600 Ans B Hour/day Day/season No of workers Overtime hours 0 0 6720 0 5280 0 Ans C Temp workers 0 0 0 0 0 0 Temp workers hours Available 0 0 0 0 0 0 Total hours Available 33600 33600 33600 33600 33600 21600 Actual prod 5600 5600 6720 5600 6480 3600 Ans A Ending Inv 0 800 0 80 0 0 Workers Hired 0 0 0 0 0 0 Workerd Laid off 0 0 0 0 0 0 Back order 0 0 320 0 0 0 10 Strait time 336000 336000 336000 336000 336000 216000 Ans E 15 Overtime 0 0 100800 0 79200 0 10 Inventory 0 8000 0 800 0 0 20 Back order 0 0 6400 0 0 0 600 Hiring 0 0 0 0 0 0 450 lay off 0 0 0 0 0 0 Total 336000 344000 443200 336800 415200 216000 Grand Total 2091200