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Determine whether the company needs to hire or layoff and what is the total hiring, layoff, and inventory cost The company also wants you to
Determine whether the company needs to hire or layoff and what is the total hiring, layoff, and inventory cost
- The company also wants you to recommend an aggregate planning strategy. They have provided you with the following information.
Month | Expected Demand | Production Days |
April 2022 | 150000 | 21 |
May 2022 | 170000 | 22 |
June 2022 | 160000 | 21 |
July 2022 | 150000 | 22 |
August 2022 | 140000 | 22 |
Workers pay per hour - $10.00
Number of labour hour required to produce 1 towel - 15 minutes
Number of hours in a shift - 8 hours
The company operates two shifts
The inventory carrying cost is 20% of the unit price.
The cost of increasing daily production rate (hiring and training) is $ 0.5 per unit
The cost of decreasing daily production rate (layoffs) is $1 per unit
Cost of subcontracting = $ 4 per unit
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