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Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,200; winter, 7,700; spring, 6,700; summer, 12,200. Inventory
Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,200; winter, 7,700; spring, 6,700; summer, 12,200. Inventory at the beginning of fall is 510 unlts. At the beginning of fall you currently have 35 workers, but you plan to hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotlated with the union an option to use the regular workforce on overtime during winter or spring only if overtime is necessary to prevent stockouts at the end of those quarters. Overtime is not avallable during the fall. Relevant costs are hiring, $90 for each temp; layoff, $180 for each worker lald off; Inventory holding, $5 per unlt-quarter; backorder, $10 per unlt; straight time, $5 per hour; overtime, $8 per hour. Assume that the productlvity is 0.5 unit per worker hour, with elght hours per day and 60 days per season. In each quarter, produce to the full output of your regular workforce, even If that results In excess production. In Winter and Spring, use overtime only if needed to meet the production required in that quarter. Do not use overtime to bulld excess inventory in prior seasons expressly for the purpose of reducing the number of temp workers in Summer. (Leave no cells blank - be certaln to enter " O " wherever requlred. Negatlve values should be Indlcated by a minus sign. Round up "Number of temp workers, Workers hlred and Workers lald off" to the next whole number and all other answers to the nearest whole number.)
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