Given the demand, cost, and operating data shown below, evaluate the following production plans: a) Produce to meet demand by varying the size of the workforce. Satisfy demand for part-time work with overtime. b) Produce with a fixed workforce of 500. Subcontract excess demand. c) Produce with a fixed workforce of 400. Subcontract excess demand. Manufacturing cost per unit $100 Subcontracting cost per unit $110 Regular hourly wage rate $12 Overtime hourly wage rate $18 Regular hours per day per worker 8 Labor hours per unit 4 Layoff cost per worker $500 Hiring cost per worker $400 Inventory holding cost per unit per month $2 Initial workforce 250 Month Demand Working days January 11,000 22 February 15,000 19 March 32,000 21 April 25,000 21 May 30,000 22 June 14,500 20
Given the demand, cost, and operating data shown below, evaluate the following production plans:
a) Produce to meet demand by varying the size of the workforce. Satisfy demand for part-time work with overtime.
b) Produce with a fixed workforce of 500. Subcontract excess demand.
c) Produce with a fixed workforce of 400. Subcontract excess demand.
Subcontracting cost per unit $110
Regular hourly wage rate $12
Overtime hourly wage rate $18
Regular hours per day per worker 8
Labor hours per unit 4
Layoff cost per worker $500
Hiring cost per worker $400
Inventory holding cost per unit per month $2
Initial workforce 250
|
Month |
Demand |
Working days |
|
January |
11,000 |
22 |
|
February |
15,000 |
19 |
|
March |
32,000 |
21 |
|
April |
25,000 |
21 |
|
May |
30,000 |
22 |
|
June |
14,500 |
20 |
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