Problem 13-6

JokersRWild makes playing cards in several different styles, but a standard deck of cards is used for planning purposes. The average worker at JokersRWild can make 10,000 sets of decks of cards per month at a cost of $3.40 per deck during regular production and $3.70 during overtime. The company currently employs 35 workers. Experience shows that it costs $1,700 to hire a worker and $1,700 to fire a worker. Inventory carrying cost is $.49 per deck per month.

The beginning inventory is 54,000, and at least that amount is desired each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month.

Month	January	February	March	April	May	June
Demand	200,000	240,000	200,000	530,000	540,000	870,000

a.	Given the above demand estimate, develop a six-month production plan based on level production. (Leave no cells blank - be certain to enter "0" wherever required.)

Level Production Plan
Month	Demand	Regular Production	Ending Inventory	Number of Workers	Hire	Fire
January
February
March
April
May
June
Total

b.	Determine the cost of the level production plan.

Total cost

$

c.	Develop a six-month production plan based on chase by using overtime (no workers will be fired and inventory increases if necessary). (Leave no cells blank - be certain to enter "0" wherever required.)

Chase Production Plan Using Overtime
Month	Demand	Regular Production	Overtime	Ending Inventory	Number of Workers	Hire	Fire
January
February
March
April
May
June
Total

d.	Determine the cost of the chase production plan.

Total cost

$

e.	Develop a six-month production plan based on chase by changing workforce level. (Leave no cells blank - be certain to enter "0" wherever required.)

Chase Production Plan Changing Workforce Level
Month	Demand	Regular Production	Ending Inventory	Number of Workers	Hire	Fire
January
February
March
April
May
June
Total

f.	Determine the cost of the chase production plan by changing workforce level.

Total cost

$