Problem 8-9 Plan production for the next year. The demand forecast is spring, 20,000; summer, 10,000; fall, 15,000; winter, 18,000. At the beginning of spring you have 70 workers and 1.000 units in inventory. The union contract specifies that you may lay off workers only once a year, at the beginning of summer. Also, you may hire new workers only at the end of summer to begin regular work in the fall. The number of workers laid off at the beginning of summer and the number hired at the end of summer should result in planned production levels for summer and fall that equal the demand forecasts for summer and fall, respectively. If demand exceeds supply, use overtime in spring only, which means that backorders could occur in winter. You are given these costs: hiring, $100 per new worker, layoff, $200 per worker laid oft: holding, $20 per unit-quarter, backorder cost $8 per unit: straight-time labor, $10 per hour; overtime, S15 per hour. Productivity is 0.5 unit per worker hour, eight hours per day, 50 days per quarter. Find the total cost of this plan. Note: Hiring expense occurs at beginning of Fall (leave no cella blank - be certain to enter "0" wherever required.) Forecast Beginning inventory Spring 20.000 1.000 Summer 10,000 0 Fall 15,000 0 Winter 18.000 0 19.000 10,000 15,000 18,000 Production required 9,500 5,000 7.500 9,000 Production hours required 70 50 75 75 Regular workdoro 14,000 10,000 15,000 15,000 Regular production 10,000 . Overtime hours .. .. 5.000 0 Overtime production 10.000 10,000 15,000 15,000 Total production 0 0 Ending ventory O Ending backorders o 3,000 0.0.0.0 Workers hind 0.0.0.0 25 0 Workurs dont 20 0 Spring 280,000 Summer 200,000 Fall 300,000 Winter 300,000 $ $ $ $ 0 0 0 Straight time Overtime Inventory 150,000 20,000 0 0 0 $ 24,000 0 0 Backorder 0 2,500 0 Hiring Layoff 0 0 0 0 4,000 204,000 $ $ $ $ 450,000 302,500 $ 324,000 Total $ 1,280,500 Total cost