Determine whether the company needs to hire or layoff and what is the total hiring, layoff, and
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Question:
Determine whether the company needs to hire or layoff and what is the total hiring, layoff, and inventory cost
- The company also wants you to recommend an aggregate planning strategy. They have provided you with the following information.
| Month | Expected Demand | Production Days |
| April 2022 | 150000 | 21 |
| May 2022 | 170000 | 22 |
| June 2022 | 160000 | 21 |
| July 2022 | 150000 | 22 |
| August 2022 | 140000 | 22 |
Workers pay per hour - $10.00
Number of labour hour required to produce 1 towel - 15 minutes
Number of hours in a shift - 8 hours
The company operates two shifts
The inventory carrying cost is 20% of the unit price.
The cost of increasing daily production rate (hiring and training) is $ 0.5 per unit
The cost of decreasing daily production rate (layoffs) is $1 per unit
Cost of subcontracting = $ 4 per unit
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