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Problem #1: Extension of the solved problem in the class The washing machine plant is interested in determining work force and production levels for the next 8 months. Forecasted demands for Jan-Aug. are: 420, 280, 460, 190, 310, 145, 110, 125. Starting inventory at the end of December is 200. The firm would like to have 100 units on hand at the end of August. Suppose we are told that over a period of 40 days, the plant had 38 workers who produced 520 units. Assume we are given the following number of working days per month (January to August): 22, 16, 23, 20, 21, 22, 21, 22. The holding cost (per unit per month): $8.50, hiring cost per worker: $800, firing cost per worker: $1,250, payroll cost: $75/worker/day, and shortage cost: $50 unit short/month. The company has 40 workers at the end of December. We solved this problem in class and obtained a value of K = 0.3421 units/worker/day. In addition, we developed a constant workforce plan with 46 workers over the planning horizon and estimated the total cost of the plan to be $599,590.50. We discussed that the cost is very high due to the high inventory level. Hence, we decided to reduce the workforce to reduce the production and the unneeded inventory. Develop a production plan with constant workforce over January to March, reduce it to be constant over April and May, and finally reduce it again to be constant over June to August without any shortage of demand. Estimate the workforce levels over these three periods and the new total cost of the developed plan.

Problem #1: Extension of the solved problem in the class The washing machine plant is interested in determining work force and production levels for the next 8 months. Forecasted demands for Jan-Aug. are: 420, 280, 460, 190, 310, 145, 110, 125. Starting inventory at the end of December is 200. The firm would like to have 100 units on hand at the end of August. Suppose we are told that over a period of 40 days, the plant had 38 workers who produced 520 units. Assume we are given the following number of working days per month (January to August): 22, 16, 23, 20, 21, 22, 21, 22. The holding cost (per unit per month): $8.50, hiring cost per worker: $800, firing cost per worker: $1,250, payroll cost: $75/worker/day, and shortage cost: $50 unit short/month. The company has 40 workers at the end of December. We solved this problem in class and obtained a value of K = 0.3421 units/worker/day. In addition, we developed a constant workforce plan with 46 workers over the planning horizon and estimated the total cost of the plan to be $599,590.50. We discussed that the cost is very high due to the high inventory level. Hence, we decided to reduce the workforce to reduce the production and the unneeded inventory. Develop a production plan with constant workforce over January to March, reduce it to be constant over April and May, and finally reduce it again to be constant over June to August without any shortage of demand. Estimate the workforce levels over these three periods and the new total cost of the developed plan.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Problem #1: Extension of the solved problem in the class The washing machine plant is interested in determining work force and production levels for the next 8 months. Forecasted demands for Jan-Aug, are: 420, 280, 460, 190, 310, 145, 110, 125. Starting inventory at the end of December is 200. The firm would like to have 100 units on hand at the end of August. Suppose we are told that over a period of 40 days, the plant had 38 workers who produced 520 units. Assume we are given the following number of working days per month (January to August): 22, 16, 23, 20, 21, 22, 21, 22. The holding cost (per unit per month): $8.50, hiring cost per worker: $800, firing cost per worker: $1,250, payroll cost: $75/worker/day, and shortage cost: $50 unit short/month. The company has 40 workers at the end of December. We solved this problem in class and obtained a value of K = 0.3421 units/worker/day. In addition, we developed a constant workforce plan with 46 workers over the planning horizon and estimated the total cost of the plan to be $599,590.50. We discussed that the cost is very high due to the high inventory level. Hence, we decided to reduce the workforce to reduce the production and the unneeded inventory. Develop a production plan with constant workforce over January to March, reduce it to be constant over April and May, and finally reduce it again to be constant over June to August without any shortage of demand. Estimate the workforce levels over these three periods and the new total cost of the developed plan.
Transcribed Image Text:Problem #1: Extension of the solved problem in the class The washing machine plant is interested in determining work force and production levels for the next 8 months. Forecasted demands for Jan-Aug, are: 420, 280, 460, 190, 310, 145, 110, 125. Starting inventory at the end of December is 200. The firm would like to have 100 units on hand at the end of August. Suppose we are told that over a period of 40 days, the plant had 38 workers who produced 520 units. Assume we are given the following number of working days per month (January to August): 22, 16, 23, 20, 21, 22, 21, 22. The holding cost (per unit per month): $8.50, hiring cost per worker: $800, firing cost per worker: $1,250, payroll cost: $75/worker/day, and shortage cost: $50 unit short/month. The company has 40 workers at the end of December. We solved this problem in class and obtained a value of K = 0.3421 units/worker/day. In addition, we developed a constant workforce plan with 46 workers over the planning horizon and estimated the total cost of the plan to be $599,590.50. We discussed that the cost is very high due to the high inventory level. Hence, we decided to reduce the workforce to reduce the production and the unneeded inventory. Develop a production plan with constant workforce over January to March, reduce it to be constant over April and May, and finally reduce it again to be constant over June to August without any shortage of demand. Estimate the workforce levels over these three periods and the new total cost of the developed plan.
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