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Problem 19-7 (Algo) Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,600; winter, 8,400; spring, 6,50
Problem 19-7 (Algo) Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,600; winter, 8,400; spring, 6,50 summer, 12,600. Inventory at the beginning of fall is 530 units. At the beginning of fall you currently have 30 workers, but you plan t hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotiated with the union an option to use the regular workforce on overtime during winter or spring only if overtime is necessary to prevent stockouts the end of those quarters. Overtime is not available during the fall. Relevant costs are hiring, $80 for each temp; layoff, $160 for ead worker laid off; inventory holding, $5 per unit-quarter; backorder, $10 per unit; straight time, $5 per hour; overtime, $8 per hour. Assume that the productivity is 0.5 unit per worker hour, with eight hours per day and 60 days per season. In each quarter, produce the full output of your regular workforce, even if that results in excess production. In Winter and Spring, use overtime only if needed meet the production required in that quarter. Do not use overtime to build excess inventory in prior seasons expressly for the purpo of reducing the number of temp workers in Summer. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round up "Number of temp workers, Workers hired and Workers laid off" to the ne whole number and all other answers to the nearest whole number.) Fall Winter Spring Summer Forecast 10.600 8,400 6,500 12,600 Beginning inventory Production required Production hours required Production hours available Overtime hours Temp workers Temp worker hours available Total hours available Actual production Ending inventory Workers hiredFall Winter Spring Summer Straight time Overtime Inventory Backorder Hiring Layoff Total Annual cost
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