Exercise 13.7

... 13.7 Consuelo Chua, Inc., is a disk drive manufacturer in need of an aggregate plan for July through December. The com- pany has gathered the following data: cost Holding cost Subcontracting Regular-time labor Overtime labor Hiring cost Layoff cost COSTS $8/disk/month $80/disk $12/hour $18/hour for hours above 8 hours/worker/day $40/worker $80/worker DEMAND* July 400 Aug. 500 Sept. 550 Oct. 700 Nov. 800 Dec. 700 *No costs are incurred for unmet demand, but unmet demand (backorders) must be handled in the following period. If half or more of a worker is needed, round up. OTHER DATA Current workforce (June) 8 people Labor-hours/disk 4 hours Workdays/month 20 days Beginning inventory 150 disks** No requirement for ending inventory O disks **Note that there is no holding cost for June. What will each of the two following strategies cost? a) Vary the workforce so that production meets demand. Chua had eight workers on board in June. b) Vary overtime only and use a constant workforce of eight