Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Plan 1: to maintain constant workforce at a level necessary to meet average demand Plan 2: to maintain constant workforce at a level necessary to
Plan 1: to maintain constant workforce at a level necessary to meet average demand
Plan 2: to maintain constant workforce at a level necessary to meet the lowest demand and meet demand above by subcontracting
Plan 3: to vary the workforce by hiring and layoff the production rate will be equal to forecasted demand each month
For the following months the expected demand will be as following: Month January February March April May June Expected demand 900 700 800 1200 1500 1100 Use the following data to compare between the three plans aforementioned to find the optimal plan (minimum cost) Inventory carrying cost = 5 per unit - Subcontracting cost = 20 per unit Average pay rate = 10 per hour (80 per day) Overtime pay rate = 17 per hour (above 8 hrs daily) Labor hrs to produce a unit = 1.6 hrs per unit - Cost of increasing daily production rate = 300 per unit Cost of decreasing daily production rate = 600 per unit The working hours under normal conditions per day are 8 hours For the following months the expected demand will be as following: Month January February March April May June Expected demand 900 700 800 1200 1500 1100 Use the following data to compare between the three plans aforementioned to find the optimal plan (minimum cost) Inventory carrying cost = 5 per unit - Subcontracting cost = 20 per unit Average pay rate = 10 per hour (80 per day) Overtime pay rate = 17 per hour (above 8 hrs daily) Labor hrs to produce a unit = 1.6 hrs per unit - Cost of increasing daily production rate = 300 per unit Cost of decreasing daily production rate = 600 per unit The working hours under normal conditions per day are 8 hoursStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started