Question: 15 50 7 Beginning Workers Beginning inventory Productive hours/worker/day- Units per worker per month Paid hours/worker/day- Working days in month 40 8 20 $1,800 $550

15 50 7 Beginning Workers Beginning inventory Productive hours/worker/day- Units per worker per month Paid hours/worker/day- Working days in month 40 8 20 $1,800 $550 Materials Holding costs - Marginal cost of backorder $800 Hiring and training cost $500 Layoff costs - $800 Straight time labor cost/hr. $30 June Feb Mar Apr 985 May 1.125 575 715 675 15 0 5 35 20 560 Chase Strategy Jan Demand 575 Beginning Inv. 50 Net 525 Requirements Beginning 15 Workers 980 675 1,105 680 28 25 17 14 17 0 o 8 3 Hired 0 3 14 0 0 0 0 17 25 14 Fired 1 Reg. Workers 14 Production 560 17 28 680 560 1.000 680 11.120 Layoff costs - Straight time labor cost/hr. $30 Feb Mar Apr 985 May 1,125 20 June 575 15 715 675 5 35 O 560 675 980 1,105 680 28 17 14 17 25 O 8 3 0 3 14 O 0 Chase Strategy Jan Demand 575 Beginning Inv. 50 Net 525 Requirements Beginning 15 Workers Hired 0 Fired 1 Req. Workers 14 Production 560 Ending 35 Inventory Material Cost Backorder Cost 0 0 14 28 17 17 25 560 680 680 1.000 1,120 0 15 0 5 20 Labor Cost What is the total backorder cost? Equal to 0 Greater than 0 Less than 0

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