Question: Develop a production plan and estimate the annual cost for a company whose forecast for the demand is in the fall, 10,000; in winter, 8,000;

  • Develop a production plan and estimate the annual cost for a company whose forecast for the demand is in the fall, 10,000; in winter, 8,000; in spring, 7,000; in summer, 12,000; inventory in early fall is 500 units. Right now, early fall, you have 30 workers, but plans to hire temporary workers in the early summer and fire them at the end of that season. In addition, he negotiated with the union the option of using the hand of regular overtime work during winter or spring if necessary to prevent inventory from running out at the end of each of those quarters. There is no extra time during fall. The relevant costs are: hiring, 100 dollars for each worker; dismissal, 200 dollars for each worker laid off; inventory maintenance, $5 per unit-quarter; late orders, $10 per unit; normal time, $5 per hour; extra time, 8 dollars per hour. Assume that productivity is 0.5 units per labor hour, with eight hours per day and 60 days per season.

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