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The Municipal Division of Road Maintenance is charged with road repair in the city and its surrounding area. Cindy, road maintenance director, must submit a
The Municipal Division of Road Maintenance is charged with road repair in the city and its surrounding area. Cindy, road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Cindy estimates that the labor hours required for the next quarters are 6,000, 12,000, 19,000, and 9,000, respectively. 1 2 3 4 Total Forecasted demand 6,000 12,000 19,000 9,000 Each of the 11 workers on the workforce can contribute 520 hours per quarter. Payroll costs are $6,240 in wages per worker for regular time worked up to 520 hours, with an overtime pay rate of $18 for each overtime hour. Overtime is limited to 20% of the regular-time capacity in any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3,000, and the cost of laying off a worker is $2,000. Subcontracting is not permitted. a. Use a chase strategy that varies the workforce level without using overtime and minimum amount of undertime. What is the total cost of this plan? b. Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime can be used to its limits in any quarter. What is the total cost of the plan and how many undertime hours does it call for? C. Propose a plan of your own. Compare your plan with those in part (a) and part (b) and discuss its comparative merits
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