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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 negotiated 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 available during the fall. Relevant costs are hiring, $80 for each temp; layoff, $160 for each worker laid off; inventory holding, $5 per unit-quarter; backorder, $10 per unit; straight time, $5 per hour; overtime, $8 per hour. Assume that the productivity is 0.5 unit per worker hour, with 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 build 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 required. Negative values should be indicated by a minus sign. Round up "Number of temp workers, Workers hired and Workers laid off" to the next whole number and all other answers to the nearest whole number.) Summer Fall Winter Spring 6,500 12,600 10,600 07 700 530 10,070 8,400 (2,870) 11,270 22,540 14,400 8,140 6,500 13,000 14,400 11,900 23,800 14,400 20,140 14,400 0 07 0 20 07 0 0 Forecast Beginning inventory Production required Production hours required Production hours available Overtime hours Temp workers Temp worker hours available Total hours available Actual production Ending inventory Workers hired 0 9,600 0 0 14,400 14,400 22,540 11,270 24,000 12,000 7,200 7,200 0 700 100 (2,870) 20 0 0 0 0 0 0 0 Workers laid off Fall Straight time Winter Spring Summer $72,000 $72,000 $72,000 $ 12,000 X 0 65,120 0 07 0 0 3,500 500 Overtime Inventory 0 Backorder 0 0 28,700 0 0 0 Hiring 1,600 0 0 0 x Layoff Total $ 100,700 $ 137,120 $75,500 $122,100 $435,420 X Annual cost References Worksheet Difficulty: 3 Hard Problem 19-7 (Algo) Learning Objective: 19-02 Construct and evaluate aggregate plans that employ different strategies for meeting demand