Plan production for a four-month period: February through May. For February and
ID: 458863 • 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, 81,600; March, 64,000; April, 100,080; May, 40,080. Productivity is five units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are hiring, $45 per new worker; layoff, $65 per worker laid off; inventory holding, $9 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $18 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.)
Explanation / Answer
Inventory Forecast
February
March
April
May
Forecast
81,600
64,000
100080
40,080
Beginning inventory
0
0
0
80
Production required
81600
64000
100080
40000
Production hours required
16000
12800
20000
8000
Regular workforce
100
80
80
80
Regular production
80000
64000
64000
64000
Overtime hours
40
0
4960
0
Overtime production
1600
0
24800
0
Total production
81600
0
11280
64000
Ending inventory
0
0
80
24000
Ending backorders
0
0
0
0
Workers hired
2
0
14
0
Workers laid off
2
0
14
0
Cost is mentioned below
February
March
April
May
Straight time
80000
128000
200000
128000
Overtime
0
0
74400
0
Inventory
0
0
0
0
Backorder
0
0
0
0
Hiring
90
0
630
0
Layoff
130
0
910
0
Total
80220
128000
275940
128000
Total cost
$
February
March
April
May
Forecast
81,600
64,000
100080
40,080
Beginning inventory
0
0
0
80
Production required
81600
64000
100080
40000
Production hours required
16000
12800
20000
8000
Regular workforce
100
80
80
80
Regular production
80000
64000
64000
64000
Overtime hours
40
0
4960
0
Overtime production
1600
0
24800
0
Total production
81600
0
11280
64000
Ending inventory
0
0
80
24000
Ending backorders
0
0
0
0
Workers hired
2
0
14
0
Workers laid off
2
0
14
0
Cost is mentioned below
February
March
April
May
Straight time
80000
128000
200000
128000
Overtime
0
0
74400
0
Inventory
0
0
0
0
Backorder
0
0
0
0
Hiring
90
0
630
0
Layoff
130
0
910
0
Total
80220
128000
275940
128000
Total cost
$