Plan production for the next year. The demand forecast is spring, 20,400; summer
ID: 393917 • Letter: P
Question
Plan production for the next year. The demand forecast is spring, 20,400; summer, 10,800; fall 14,400; winter, 18,200. At the beginning of spring you have 63 workers and 1,080 unts 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 fal. The number of workers laid off at the beginning of summer and the number hired at the end of summer should resut in planned production levels for summer and fall that equal the demand forecasts for summer and fal, respectively. If demand exceeds suppy, use overtime in spring only, which means that backorders could occur in winter. You are given thesc costs: hiring, $100 per new worker, layoff, $200 per worker laid oft, holding, $19 per unt-quarter, backorder cost, $12 per unit straight-time labor, $13 per hour, overtime, $20 per hour. Productvity is 0.5 unit per worker hour, eight hours per day, 50 days per quarter. Find the total cost of this plan. Note: Hiring cxpense occurs at beginning of Fal. (Leave no cells blank be certain to enter "O" wherever required.) Fall Winter 20,400 10,800 14,400 18,200 Beginning inventory Production required Production hours required Regular wordorce Rogular production Overtime hours Total production Ending inventory Ending backorders Workers hired Workers laid off Winter Straight time Overtime Backorder Hiring Layotf Total Total costExplanation / Answer
Spring Summer Fall Winter 1 Forecast 20,400 10,800 14,400 18,200 2 Begining Inventory 1080 - - - 3 Production required (1) - (2) 19,320 10,800 14,400 18,200 4 Production hours required(3)/ 0.5) 38,640 21,600 28,800 36,400 5 Regular workforce (63 workers X 8 hours X 50 days) 25,200 21,600 28,800 28,800 6 Regular Production [(5) X 0.50] 12,600 10,800 14,400 14,400 7 Overtime hours (4) - (5) 13,440 - - 0 8 Overtime Production [(7) X 0.50] 6,720 - - 0 9 Total Production (6) + (8) 19,320 10,800 14,400 14,400 10 Ending Inventory (2) + (9) - (1) - - - 0 11 Ending Backorders (1) - (2) - (9) - - - 3,800 12 Workers hired - - 18 - 13 Workers laid off - 9 - - Workings: Workers used 63 21,600 / (8 hours X 50 days) = 54 28,800 / (8 hours X 50 days) = 72 72 Workers hired 72 - 54 = 18 Workers laid off 63 - 54 = 9 Spring Summer Fall Winter ($) ($) ($) ($) Straight time 3,27,600 2,80,800 3,74,400 3,74,400 Overtime 2,68,800 - - - Inventory - - - - Backorder - - - 45,600 Hiring - - 1,800 - Layoff - 1,800 - - Total 5,96,400 2,82,600 3,76,200 4,20,000 Total cost 16,75,200 Workings: Spring Summer Fall Winter ($) ($) ($) ($) Straight time $ 13 25,200 $3,27,600 21,600 $ 2,80,800 28,800 $ 3,74,400 28,800 $ 3,74,400 Overtime $ 20 13,440 $2,68,800 Inventory $ 19 - Backorder $ 12 3,800 $ 45,600 Hiring $ 100 18 $ 1,800 Layoff $ 200 9 $ 1,800 Total $5,96,400 $ 2,82,600 $ 3,76,200 $ 4,20,000