Jonestone manufacturing is a local company that manufactures machines for which demand varies considerably from month to month. This puts Jonestone in extreme difficulty to

Schedule its workforce. Recently Jonestone started hiring temporary workers supplied by WorkForce Unlimited, a company that specializes in providing temporary employees for

firms in the greater Atlanta area. WorkForce Unlimited offered to provide temporary employees under three contract options that differ in terms of the length of employment and

the cost. The three options are summarized:

Option	Length	Employment cost
Option 1	One month	$2,000
Option 2	Two months	$4,800
Option 3	Three months	$7,500

The longer contract periods are more expensive because WorkForce Unlimited experiences

greater difficulty finding temporary workers who are willing to commit to longer work

assignments.

Over the next six months, Jonestone projects the following needs for additional employees:

	Jan	Feb	Mar	April	May	June
Employees needed	10	23	19	26	20	14

Each month, Jonestone can hire as many temporary employees as needed under each of the three options. For instance, if Jonestone hires five employees in January under Option 2,

WorkForce Unlimited will supply Jonestone with five temporary workers who will work two months: January and February. For these workers, Jonestone will have to pay 5(4800) = $24,000. Because of some merger negotiations under way, Jonestone does not want to commit to any contractual obligations for temporary employees that extend beyond June.

Jonestone s quality control program requires each temporary employee to receive training at the time of hire. The training program is required even if the person worked for Jonestone in the past. Jonestone estimates that the cost of training is $875 each time a temporary employee is hired. Thus, if a temporary employee is hired Jonestone will incur a

training cost of $875 in the first month of hire but will incur no additional training cost if the employee is on a two- or three-month contract.

Develop a model that can be used to determine the number of temporary employees Jonestone should hire each month under each contract plan in order to meet the projected needs at a

minimum total cost. Include the following items in your report:

1. A schedule that shows the number of temporary employees that Jonestone should hire each month for each contract option.

2. A summary table that shows the number of temporary employees that Jonestone should hire under each contract option, the associated contract cost for each option, and the associated training cost for each option. Provide summary totals showing the total number of temporary employees hired, total contract costs, and total training costs.

3. An explanation of how reducing the cost to train each temporary employee to $700 per month affects the hiring plan. Discuss the implications that this effect on the hiring plan has for identifying methods for reducing training costs. How much of a reduction in training costs would be required to change the hiring plan based on a training cost of $875 per temporary employee?

4. Answer and Sensitivity report findings and discussion

5. A recommendation regarding the decision to hire additional full-time employees if Jonestone can hire 10 full-time employees at the beginning of January in order to satisfy part of the labor requirements over the next six months. Assume that Jonestone can hire full-time employees at $16.50 per hour, including fringe benefits, and that full-time and temporary employees work approximately 160 hours per month. What effect would the hiring of additional full-time employees have on total labor and training costs over the six-month period as compared to hiring only temporary employees?