• Inventory and backorder costs are calculated using ending inventory / backorder of each month.

• Hiring or layoff costs are incurred when the total number of workers changes.

• The number of workers in each month should be an integer. Once scheduled, all

  workers will produce at their full potential each month.

• The ending inventory requirement of June stated in the cell Aggregate!B12 must be

  satisfied.

A level strategy without the use of prefabrications to meet the overall production requirement. That is, use a constant number of workers for these 6 months; all workers produce without the use of prefabrication parts; demand variations are absorbed by inventory and backorders. Hiring and layoff only happens at the beginning of January.

A B C D E F G H I J 20 40 worker minute per unit 30 worker minute per unit 200 hours 5 $ per hour 1 $ per unit 1.8 $ per unit per month 2 $ per unit per month 400 $ per worker 500 $ per worker 100 units 100 units (at least these many units) 2 9700 3 7600 4 8100 5 7500 6 Total 8600 48300 6800 1 Initial number of workers 2 Required Production time (not using prefabs) 3 Required Production time (using prefabs) 4 Regular hours per month 5 Salary 6 Additional material cost of using prefabs 7 Inventory holding cost 8 Backorder cost 9 Hiring workers 10 Laying off workers 11 Beginning Inventory of January 12 Required Ending Inventory of June 13 14 15 Period 16 Demand 17 Total number of workers 18 Number of workers (not using prefabs) 19 Number of workers (using prefabs) 20 21 Beginning Inventory 22 Production quantity (not using prefabs) 23 Production quantity (using prefabs) 24 Ending Inventory (use negative for backorder) 25 26 Hiring cost 27 Laying off cost 28 Labor cost 29 Additional material cost (prefabs) 30 Inventory holding cost 31 Backorder cost 32 33 34 35 36 Total cost 27