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A tutoring center experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow. As a service industry there is
A tutoring center experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow. As a service industry there is no ability to hold inventory or take backorders, all demand must be met or it will be a lost sale. Costs associated with operations 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 spreadsheet approach and 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
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