Question: Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,200; winter, 7,700, spring, 6,700; summer, 12,200. Inventory

 Develop a production plan and calculate the annual cost for a

Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,200; winter, 7,700, spring, 6,700; summer, 12,200. Inventory at the beginning of fall is 510 units. At the beginning of foll, you have 35 workers, but you plan to hitre temporary workers at the beginning of summer and lay them off at the end of summet. 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 backorders at the end of those quarters. Overtime is not avallable dunng the fall. Relevant costs are hirng, $900 for each temp, layoft, $1,800 for each worker lald off, inventory holding, $5 per unit-quarter, backorder, $10 per unit straight time, $25 per hour, overtime, $35 per hour. Assume that the productivity is 0.5 unit per worker hout, whth eight hours per day and 60 days per season in each quarter, produce to the fult output of your regular workforce, even if that results in excess production. In whter and spring, use overtime only if needed to meet the production required in that quarter Do not use overtime to buld excess inventory in prior seasons expressly for the purpose of reducing the number of temp workers in Summer: Note: Leave no cells blank - be certain to enter " 0 " wherever required, Negative values should be Indicoted by a minus sign. Round up "Number of temp workers, Workers hired, and Workers loid off" to the next whole number and all other answers to the nearest whole number

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!