Suppose you wish to have an aggregate plan for LZ Girl that holds as little inventory as possible, while meeting the no shortage requirement and always producing at capacity.

a) What is the layoff cost of this plan over the six month horizon?

Suppose instead that you wish to have an aggregate plan for LZ Girl that uses a constant workforce strategy with no backorders allowed while using the minimum workforce level possible over the horizon.

b) What is the layoff cost of this plan over the six month horizon?

c) What is the hiring cost of this plan over the six month horizon?

d) What is the payroll cost of this plan over the six month horizon?

1c. LZ Girl makes recliners. One plant assembles the L-4000 model. Standards indicate that one worker can assemble five recliners per day. The company estimates it costs $9 to hold one recliner in inventory for one month. Workers earn $2000 per month and can be hired for $1500 each. Laying off a worker costs $3000. Currently, there are 14 workers in the assembly department. No backorders are allowed. The inventory on hand at the end of June was 400 units. Assume that you want to have at least 300 units in inventory at the end of December, you must hire and layoff in integer numbers of workers, and that you must always produce at capacity. Note: You should add the cost of the 300 units of inventory added to net demand in the last month to properly account for inventory costs. Month July August Working days October 22 22 September 21 22 November 19 December 20 Forecasted Demand 1100 889 840 1050 1320 780