Problem 1 (27.5 points). The HR department for a given company needs to identified the quantity of employees required each month for the next sixth-month production period. From past data, the company is estimating that demand over the next six months will be as follow: Month July August September October November December Forecast Demand 1300 1200 750 800 2000 2150 The company estimated that they will end with 300 units but the actual inventory on hand at the end of June was 400 units. The company wants to maintain a minimum inventory of 200 units each month at a holding cost of $2.5 per unit, and would like to have 500 units on hand at the end of December. Each unit requires six employee hours to produce, there are 21 working days each month and each employee works eight hours per day. The work force at the end of June was 35 employees. On average, each employee is paid $2,100 per month. Based on the effort of interviewing and training new employees, Toda Cola Inc. estimates that it costs $700 for each employee hired. Firing pay amounts to $1,150 per employee. a. (15 points). Determine minimum inventory production plan that allows arbitrary hiring and firing. Determine planned production, number of employees needed, hires or fires. b. (8 points). Evaluate the costs that will be incurred per period based on the information given from the company. C. (4.5 points). What is the aggregate total cost for the six-period production plan? Problem 1 (27.5 points). The HR department for a given company needs to identified the quantity of employees required each month for the next sixth-month production period. From past data, the company is estimating that demand over the next six months will be as follow: Month July August September October November December Forecast Demand 1300 1200 750 800 2000 2150 The company estimated that they will end with 300 units but the actual inventory on hand at the end of June was 400 units. The company wants to maintain a minimum inventory of 200 units each month at a holding cost of $2.5 per unit, and would like to have 500 units on hand at the end of December. Each unit requires six employee hours to produce, there are 21 working days each month and each employee works eight hours per day. The work force at the end of June was 35 employees. On average, each employee is paid $2,100 per month. Based on the effort of interviewing and training new employees, Toda Cola Inc. estimates that it costs $700 for each employee hired. Firing pay amounts to $1,150 per employee. a. (15 points). Determine minimum inventory production plan that allows arbitrary hiring and firing. Determine planned production, number of employees needed, hires or fires. b. (8 points). Evaluate the costs that will be incurred per period based on the information given from the company. C. (4.5 points). What is the aggregate total cost for the six-period production plan
