Beginning Workers		15
Beginning inventory =		300
Productive hours/worker/day =		7.25
Units per worker per month		25
Paid hours/worker/day =		8
Working days in month		20

Materials =	$1,500
Holding costs =	$450
Marginal cost of backorder =	$600
Hiring and training cost =	$500
Layoff costs =	$800
Straight time labor cost/hr.	$25

Chase Strategy	Jan	Feb	Mar	Apr	May	June
Demand	500	640	600	910	1,050	500
Beginning Inv.	300	0	10	10	0	0
Net Requirements	200	640	590	900	1,050	500
Beginning Workers	15	8	26	24	36	42
Hired	0	18	0	12	6	0
Fired	7	0	2	0	0	22
Req. Workers	8	26	24	36	42	20
Production	200	650	600	900	1,050	500
Ending Inventory	0	10	10	0	0	0
Material Cost
Backorder Cost
Labor Cost

1. What is the total labor cost?

a.$624,000

b.$672,000

c.$720,000

d. $565,500

2.Using the data above what is the total material cost?

a. $6,500,000

b.$6,300,000

c. $5,850,000

d. $5,820,000