21 Develop a production plan and calculate the annual cost for a firm whose demand forecast is: fall, 10,900; winter, 8,400; spring, 7,100; summer, 12,900. Inventory at the beginning of fall is 545 units. At the beginning of fall you currently have 30 workers, but you plan to hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotiated with the union an option to use the regular workforce on overtime during winter or spring if overtime is necessary to prevent stock-outs at the end of those quarters. Overtime is not available during the fall. Relevant costs are hiring, $80 for each temp: layoff, $160 for each worker laid off, inventory holding. $5 per unit-quarter; backorder, $10 per unit; regular time, $5 per hour; overtime, $8 per hour. Assume that the productivity is 0.5 unit per worker hour, with eight hours per day and 60 days per season. In each quarter, produce to the full output of your regular workforce, even if that results in excess production. In Winter and Spring, use overtime only if needed to meet the production required in that quarter. Do not use overtime to build excess inventory in prior seasons expressly for the purpose of reducing the number of temp workers in Summer. (Leave the cells blank, whenever zero (0) is required. Negative values should be indicated by a minus sign. Round up "Number of temp workers, Workers hired and Workers laid off" to the next whole number and all other answers to the nearest whole number.) Winter Fall 10,900 Summer 8,400 545 12,900 180 Forecast Beginning inventory Production required Production hours required Production hours available Spring 7.100 0 7,100 14,200 -3,155 11.555 10,355 20,710 23.110 12,720 25,440 14,400 14,400 14,400 Overtime hours 14,400 8,710 0 160 0 0 0 0 23 11,040 0 0 14,400 23.110 14,560 Temp workers Temp worker hours available Total hours available Actual production Ending inventory Workers hired Workers laid off 25,440 12,720 11,555 7,200 -3,1551 7,280 0 180 0 23 23 Fall Winter Spring $ 72,000 Regular time Overtime $ Summ $ 127,200 5 $ 72,000 8 0 69,680 0 5 0 0 0 Inventory Backorder 10 31,550 0 0 Hiring 80 0 0 0 0 Layoff Total 0 160 268 $ $ 103,550 $ 141,680 3,680 130,880 376,378 $ $ Annual cost Prev 1 of 2 TE Next > Based on your analysis in the previous section, as an Operational Manager write a brief report for the business owner. For full marks you must include the following: 1. Explain what each of the costs are in each of the seasons. Explain what causes the difference in the costs among the seasons. (5 marks] 2. Identify your areas of concerns and explain why they are a concern for this business. Ensure to focus on both cost and non-cost related issues. [5 marks] 3. As a consultant, itemize 5 recommendations to this business to help reduce its costs. [10 marks] Essay BI U S ====