Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 0 . Management at the Kirby Inc. has determined the following aggregated demand schedule ( in units ) . Month 1 2 3 4

10. Management at the Kirby Inc. has determined the following aggregated demand schedule (in units).
Month 123456789101112
Demand 80020001,1001,5002,0003,1002,7001,5001,4001,9002,5001,500
An employee can produce an average of 10 units per month. Each worker on the payroll costs $2,500 in regular time wages per month. Undertime is paid at the same rate as regular time. In accordance to labor contract in force, Kirby Inc. does not work overtime or use subcontracting. Kerby can hire and train a new employee for $1,500 and lay off one for $500. Inventory costs $32 per unit on hand at the end of each month. At present 100 employees are on payroll, and current inventory is zero.
a. Prepare a production plan using a chase strategy, relying only on hiring and layoffs. What is the total cost of this plan?
b. Prepare a production plan that only uses level workforce. Layoffs, undertime, vacation, subcontracting, backorders, and stockout are not options. What is the total cost of this plan?
IMPORTANT HOW TO (Hint: Calculate the minimum number of employees required to satisfy demand for every month by maintaining end inventory at above or equals to zero.
Leftover inventory from previous month can roll over the following month. Make sure you check ending inventory at each month. End inventoryt= begin inventoryt-demandt, while begin invt+1=end invt+productiont+1.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding And Managing Public Organizations

Authors: Hal G. Rainey

4th Edition

047040292X, 978-0470402924

More Books

Students also viewed these General Management questions