A manager faces peak [week] demand for one of her operations, but is not sure how long

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A manager faces peak [week] demand for one of her operations, but is not sure how long the peak will last. She can either use overtime from the current workforce, or hire/lay off and just pay regular-time wages. Regular- time pay is $500 per week, overtime is $750 per week, the hiring cost is $2,000, and (he layoff cost is $3.000 assuming that people are available seeking such a short- term arrangement, how many weeks must the surge in demand last to justify a temporary hire? Him: Use break- even analysis (see Supplement A, “Decision Making). Let w be the number of weeks of the high demand (rather than using Q for the break-even quantity). What is the fixed cost for the regular-time option? Overtime option?

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Operations management processes and supply chain

ISBN: 978-0136065760

9th edition

Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra

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