DECISION PROBLEM $3$: Operations Planning and Scheduling$$

Managers must develop sales and operations plans $($S&OP$)$ that calculate future aggregate resource levels so that supply is in balance with demand. S&OP states a company's or a department's production rates, workforce levels, and inventory holdings are consistent with demand forecasts and capacity constraints.$$

In the window frame assembly department at Olde World, the manager estimates the following workforce requirements for its services over the next two years:$($see table$).$

Currently, $8$ certified machinists are employed to work in this department. Each employee works $400$ hours every quarter but is also allowed to work up to an additional $100$ hours of overtime. The company has a cost of $$12,000$ per employee per quarter for regular time worked up to $400$ hours. This is based on$$

$$30/$hour$,$ which must be paid whether the machinists are active or idle. Overtime work is paid at a rate of$$

$$45$ per hour on an as$-$needed basis. The company incurs costs of $$15,000$ to hire and train each new machinist and incurs costs of $$6,000$ for each machinist it lays off.$$

Based on the information above:$$

A$.$ Use a level strategy to create a staffing plan for this department that results in no service delays. Your plan can use only overtime to meet the goals and must minimize the inactive undertime. What is the total cost of your plan based on these parameters?$$

B$.$ Create a plan that uses a chase strategy to vary the workforce level, but that does not result in any overtime while minimizing undertime. What is the total cost of your plan based on these parameters?$$

C$.$ Propose a staffing plan that would be superior to both a level strategy and a chase strategy. What benefits would the plan provide for Olde World? Consider the total cost of the plan as well as$$

non$-$financial factors that make the plan a better choice to optimize performance.$$

Quarter $12345678$ Demand $($in hours$)4,0005,0003,5004,1004,3005,8003,4004,400$