Plan production for a four-month period: February through May. For February and
ID: 443579 • Letter: P
Question
Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 81,408; March, 61,440; April, 100,000; May, 40,000. Productivity is four units per worker hour, eight hours per day, 24 days per month. Assume zero inventory on February 1. Costs are hiring, $45 per new worker; layoff, $65 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit.
Find the total cost of this plan. (Negative values should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest whole number.)
Find the total cost of this plan. (Negative values should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest whole number.)
Explanation / Answer
February March April May Forecast 81,408 61,440 100,000 40,000 Beginning Inventory 0 -4,608 10,752 0 Production Required 81,408 66,048 89,248 40,000 Production Hour required 20352 16512 22312 10000 Production Hour Available 19,200 19,200 19,200 19,200 Overtime Hours 0 0 3,112 0 Temp Worker 0 0 0 0 Total Hour Available 19,200 19,200 22,312 19,200 Actual Production 76,800 76,800 89,248 76,800 Ending Inventory -4,608 10,752 0 36,800 Workers Hired 0 0 0 0 Workers Laid Off 0 0 0 0 Straight Time $192,000.00 $192,000.00 $192,000.00 $192,000.00 Over time $0.00 $0.00 $46,680.00 $0.00 Inventory $0.00 $0.00 $107,520.00 $7,000.00 Backorder $0.00 $92,160.00 $0.00 $0.00 Hiring $0.00 $0.00 $0.00 $0.00 Layoff $0.00 $0.00 $0.00 $0.00 Total $192,000.00 $284,160.00 $346,200.00 $199,000.00 Annual Cost $1,021,360.00