A metal shop currently has a work force of 20 people and is considering hiring four more people for the next three weeks only. The cost of hiring and training one person is $200 and the cost of terminating one person is $100. Each employee can produce 40 units/week on regular time and four units/week on overtime, and each person must be paid to produce 40 units even if the demand is not sufficient enough to keep even one busy. The cost of producing one unit on regular time is $20 while on overtime it is $30. The cost of subcontracting one unit is $40. Demand for the next three weeks is 800 units, 1200 units, and 1000 40#6. Because there is no storage available the shop has a policy that no inventory is I be carried over from week to week.

a. What is the total cost for week 1 if there are only 20 workers?

b. What is the total cost for all three weeks using only 20 workers?

c. What is the total cost for week I if the company uses 24 workers?

d. What is the total cost for all three weeks using all 24 workers?

Answer rating: 100% (QA)

Calculation For 20 workers Week 1 Week 2 Week 3 Demand units 800 1200 1000 Regular workers 20 20 20 ... View the full answer