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2) Bradys company observes a seasonal demand for the services it offers to the customers. The workforce requirements over a six-month period are:

Period 1 2 3 4 5 6

Requirement 7 8 9 11 12 7

Relevant costs are as follows:

Wages = $2,000 per worker per month

Hiring cost = $1,000 per worker

Layoff cost = $1,500 per worker

The current workforce level is 10 workers. Use the preceding data to answer the following questions:

a. What is the total cost of a staffing plan, including the cost of regular wages, hiring, and layoffs using a chase strategy with hiring and layoffs, but no overtime?

b. What is the total cost of the staffing plan, using a level strategy in which no overtime is allowed and the undertime paid for?

c. Suppose that overtime is allowed up to 25% of the regular-time capacity, and that overtime wages are 150% of the regular-time rate. What is the total cost of the level strategy with overtime and undertime that also minimizes undertime?

d. Which strategy do you pick? Why?

a) Prepare a staffing plan using Chase Strategy

	Period
	1	2	3	4	5	6	Total
Forecasted demand (workers)
Workforce level (workers)
Undertime (hours)
Overtime (workers)
Utilized time (workers)
Hires (workers)
Layoffs (workers)

Total Cost =

b) Prepare a staffing plan using Level Strategy without Overtime

c) Prepare a staffing plan using Level Strategy with Overtime

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