Question: Problem 1 9 - 7 ( Algo ) Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall,

Problem 19-7(Algo)
Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,600; winter, 8,400 ; spring, 6,500 ;
summer, 12,600. Inventory at the beginning of fall is 530 units. At the beginning of fall you currently have 30 workers, but you plan to
hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotlated with the
union an option to use the regular workforce on overtime during winter or spring only if overtime is necessary to prevent stockouts at
the end of those quarters. Overtime is not avallable during the fall. Relevant costs are hiring, $80 for each temp; layoff, $160 for each
worker lald off; Inventory holding, $5 per unit-quarter; backorder, $10 per unit; straight time, $5 per hour, overtime, $8 per hour.
Assume that the productlvity is 0.5 unit per worker hour, wlth eight hours per day and 60 days per season. In each quarter, produce to
the full output of your regular workforce, even If that results in excess production. In Winter and Spring, use overtime only If needed to
meet the production required in that quarter. Do not use overtime to bulld excess inventory in prior seasons expressly for the purpose
of reducing the number of temp workers in Summer. (Leave no cells blank - be certain to enter "0" wherever requlred. Negatlve
values should be Indlcated by a minus sign. Round up "Number of temp workers, Workers hlred and Workers lald off" to the next
whole number and all other answers to the nearest whole number.)
 Problem 19-7(Algo) Develop a production plan and calculate the annual cost

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!