Because the work is so challenging, five people leave their MO job at the end of every month. To fill those vacancies, MO conducts training sessions to add 10 new workers to its frontline staff every two months. The training sessions take one week to complete and have a fixed cost of $2,000 no matter how many new hires are being trained. After completing their training, workers are on call and assigned to part-time duties while they wait for a full-time spot to open. Management at MO has estimated that each on-call worker costs $7,500 annually!

1 Describe the product and the inventory strategy you will analyze (or indicate that you are using Mighty Oaks Scenario 2). Be specific.

2 Use the EOQ Calculator to calculate the total annual cost of the strategy described above. Include your calculations. If you are using Mighty Oaks Scenario 2, that’s the total annual cost of the MO recruitment strategy.
Copy and paste the tables from the Excel spreadsheet below.

3 Is the current strategy optimal? How can you tell?

4 If the current strategy is not minimizing the total annual cost, describe the optimal strategy, including its total annual cost. Include your calculations.