Question

# Plan production for a four-month period: February through May. For February and March, you should produce...

Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 80,000; March, 64,000; April, 100,000; May, 40,000. Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are hiring, \$50 per new worker; layoff, \$70 per worker laid off; inventory holding, \$10 per unit-month; straight-time labor, \$10 per hour; overtime, \$15 per hour; backorder, \$20 per unit. Develop a production plan and calculate the total cost of this plan. Note: Assume any layoffs occur at beginning of next month. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to the nearest whole number.) February March April May Forecast 80,000 64,000 100,000 40,000 Beginning inventory Production required Production hours required Regular workforce Regular production Overtime hours Overtime production Total production Ending inventory Ending backorders Workers hired Workers laid off February March April May Straight time \$ \$ \$ \$ Overtime Inventory Backorder Hiring Layoff Total \$ \$ \$ \$ Total cost \$

 February March April may Forecast 80000 64000 100000 40000 Beginning inventory 0 -16000 -16000 -32000 Production required 80000 80000 116000 72000 Production hours required 20000 20000 29000 18000 Regular workforce 100 100 100 100 Regular production 64000 64000 64000 64000 Overtime hours 0 0 5000 2000 Overtime production 0 0 20000 8000 Total production 64000 64000 84000 72000 Ending inventory 0 0 0 0 Ending backorders 16000 16000 32000 0 Workers hired 0 0 0 0 Workers laid off 0 0 0 0 Straight time 160000 160000 160000 160000 Overtime 0 0 75000 30000 Inventory 0 0 0 0 Backorder 320000 320000 64000 0 Hiring 0 0 0 0 Layoff 0 0 0 0 Total 0 0 0 0 Total cost 480000 480000 299000 190000

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