70.2K

Verified Solution

Link Copied!

Problem 8-9 Plan production for the next year. The demand forecast is spring, 20,000; summer, 10,000; fall, 15,000; winter, 18,000. At the beginning of spring you have 70 workers and 1,000 units 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 fall. The number of workers laid off at the beginning of summer and the number hired at the end of summer should result in planned production levels for summer and fall that equal the demand forecasts for summer and fall, respectively. If demand exceeds supply, use overtime in spring only, which means that backorders could occur in winter. You are given these costs: hiring, $100 per new worker; layoff, $200 per worker laid off; holding, $20 per unit-quarter; backorder cost, $8 per unit; straight-time labor, $10 per hour; overtime, $15 per hour. Productivity is 0.5 unit per worker hour, eight hours per day, 50 days per quarter. Find the total cost of this plan. Note: Hiring expense occurs at beginning of Fall. (Leave no cells blank - be certain to enter "0" wherever required.) Fall 15,00 Forecast Beginning inventory Production required Production hours required Regular workforce Regular production Overtime hours Overtime noduction Spring 20,000 1000 19000 9500 70 14000 10000 Summer 10,000 0 10000 5000 50 10000 0 15000 7500 75 15000 o Fall 15,000 0 15000 7500 Winter 18,000 0 18000 Forecast Beginning inventory Production required Production hours required Regular workforce Regular production Overtime hours Overtime production Total production Ending inventory Ending backorders Workers hired Workers laid off Spring 20,000 1000 19000 9500 70 14000 10000 5000 19000 0 Summer 10,000 0 10000 5000 50 10000 0 0 10000 75 9000 75 15000 0 15000 0 0 15000 0 15000 0 0 0 0 0 0 3000 0 0 0 0 25 0 20 0 Winter Fall $ 300000 0 $ 300000 Straight time Overtime Inventory Backorder Hiring Layoff Total Spring $ 280000 150000 20000 0 0 0 450000 Summer $ 200000 0 0 0 0 4000 $ 204000 0 0 $ 0 0 24000 0 0 324000 2500 $ 0 302500 $ $ Total cost $ 1280500 Problem 8-9 Plan production for the next year. The demand forecast is spring, 20,000; summer, 10,000; fall, 15,000; winter, 18,000. At the beginning of spring you have 70 workers and 1,000 units 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 fall. The number of workers laid off at the beginning of summer and the number hired at the end of summer should result in planned production levels for summer and fall that equal the demand forecasts for summer and fall, respectively. If demand exceeds supply, use overtime in spring only, which means that backorders could occur in winter. You are given these costs: hiring, $100 per new worker; layoff, $200 per worker laid off; holding, $20 per unit-quarter; backorder cost, $8 per unit; straight-time labor, $10 per hour; overtime, $15 per hour. Productivity is 0.5 unit per worker hour, eight hours per day, 50 days per quarter. Find the total cost of this plan. Note: Hiring expense occurs at beginning of Fall. (Leave no cells blank - be certain to enter "0" wherever required.) Fall 15,00 Forecast Beginning inventory Production required Production hours required Regular workforce Regular production Overtime hours Overtime noduction Spring 20,000 1000 19000 9500 70 14000 10000 Summer 10,000 0 10000 5000 50 10000 0 15000 7500 75 15000 o Fall 15,000 0 15000 7500 Winter 18,000 0 18000 Forecast Beginning inventory Production required Production hours required Regular workforce Regular production Overtime hours Overtime production Total production Ending inventory Ending backorders Workers hired Workers laid off Spring 20,000 1000 19000 9500 70 14000 10000 5000 19000 0 Summer 10,000 0 10000 5000 50 10000 0 0 10000 75 9000 75 15000 0 15000 0 0 15000 0 15000 0 0 0 0 0 0 3000 0 0 0 0 25 0 20 0 Winter Fall $ 300000 0 $ 300000 Straight time Overtime Inventory Backorder Hiring Layoff Total Spring $ 280000 150000 20000 0 0 0 450000 Summer $ 200000 0 0 0 0 4000 $ 204000 0 0 $ 0 0 24000 0 0 324000 2500 $ 0 302500 $ $ Total cost $ 1280500

Answer & Explanation Solved by verified expert

See Answer