Calculate the annual cost for firm who demand forecast

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Reference no: EM132090637

Develop a production plan and calculate the annual cost for a firm who's demand forecast is fall, 10,000 units; winter, 8000 units, spring, 7000 units and summer, 12,000 units.

Inventory at the beginning of fall is 500 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 by 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 if it is necessary

to prevent stockouts at the end of those quarters. Overtime is not available during the fall. Relevants costs are hiring, $100 for each temp; layoff, $200 for each worker laid off;

inventory holding, $5 per unit per quarter; backorder, $10 per unit; straight time,, $14 per hour; overtime, $21 per hour.

Assume the productivity is 0.5 units per worker hour, with eight hours per day and 60 days per season.

Reference no: EM132090637

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