4. On December 20 (the end of the fourth quarter), Ivar Jorgenson, head operations planner for Ski & Sea, Inc., is in charge of developing a sales and operations plan for the coming year. Ski &

Sea assembles jet skis and snowmobiles from subassemblies and component parts provided by reliable vendors. Both products (end items) utilize the same small engines and many of the same parts. They require the same assembly time and employee labor skills. The available planning information is as follows:

Demand Forecasts Quarter Jet Skis Snowmobiles 1 10,000 9,000 2 15,000 7,000 3 16,000 19,000 4 3,000 10,000 Anticipated Quarter 1 Beginning inventory 600 skis 400 Snowmobiles Production and costs Regular time $15.00 per unit Overtime $22.50 per unit Subcontract $30.00 per unit Part-time $36.00 per unit Inventory $3.00 per unit per quarter, based on average inventory during each quarter Back order $24.00 per unit per quarter (based on back orders at end of quarter)

Hiring $300.00 per full-time employee (no cost if part-time)

Layoff $1,500.00 per full-time employee (no cost if part-time)

Production rates Regular 500 units per full-time employee per quarter (of either unit)

Overtime (max.) 200 units per full-time employee per quarter (of either unit)

Part-time 400 units per part-time employee per quarter (of either unit)

Initial workforce size 44 full-time employees (beginning of quarter 1)

Additional assumptions 1. Part-time employees may not work overtime.