Question: The Cranston Telephone Company employs workers who lay telephone cables and perform various other construction tasks. The company prides itself on good service and strives
The Cranston Telephone Company employs workers who lay telephone cables and perform various other construction tasks. The company prides itself on good service and strives to complete all service orders within the planning period in which they are received. Each worker puts in 600 hours of regular time per planning period and can work as many as an additional 100 hours of overtime. The operations department has estimated the following staff requirements for such services over the next four planning periods:
Cranston pays regular-time wages of $6,000 per employee per period for any time worked up to 600 hours (including undertime). The overtime pay rate is $15 per hour over 600 hours. Hiring, training, and outfitting a new employee costs $8,000. Layoff costs are $2,000 per employee.
Currently, 40 employees work for Cranston in this capacity. No delays in service, or backorders, are allowed. Use the spreadsheet approach to answer the following questions:
a. Prepare a chase strategy using only hiring and layoffs. What are the total numbers of employees hired and laid off?
b. Develop a staffing plan that uses the level strategy, relying only on overtime and undertime. Maximize the use of overtime during the peak period so as to minimize the workforce level and amount of undertime.
c. Propose an effective mixed-strategy plan.
d. Compare the total costs of the three plans.
Planning Period Demand (hours) 1 2 3 21,000 18,000 30,000 4 12,000
Step by Step Solution
3.29 Rating (167 Votes )
There are 3 Steps involved in it
a The chase strategy workforce level is calculated by dividing the demand for each period by 600 hours or the amount or regulartime work for one emplo... View full answer
Get step-by-step solutions from verified subject matter experts
100% Satisfaction Guaranteed-or Get a Refund!
-
Access 30 Million+ textbook solutions.
-
Ask unlimited questions from AI Tutors.
-
Order free textbooks.
-
100% Satisfaction Guaranteed-or Get a Refund!
Study Help