Question: Reconsider the FlexMan data from Exercise 4 . The firm is considering the option of changing workforce size with demand. The cost of hiring a

Reconsider the FlexMan data from Exercise
4
.
The firm is considering the option of changing workforce size with demand. The cost of hiring a new employee is $
7
0
0
and the cost of a layoff is $
1
0
0
0
.
It takes an employee two months to reach full production capacity. During those two months, a new employee provides only
5
0
percent productivity. Anticipating a similar demand pattern next year, FlexMan aims to end the year with
6
,
3
0
0
employees.

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