Develop a production plan and calculate the annual cost

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Reference no: EM13100789

Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,000; winter, 8,000; spring, 7,000; summer, 12,000. 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 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, $100 for each temp; layoff, $200 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. (Round up "Number of temp workers" to the next whole number and all other answers to the nearest whole number. Negative values should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)

	Fall	Winter	Spring	Summer
Forecast	10,000	8,000	7,000	12,000
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
Workers laid off

	Fall	Winter	Spring	Summer
Straight time	mce_markernbsp;	mce_markernbsp;	mce_markernbsp;	mce_markernbsp;
Overtime
Inventory
Backorder
Hiring
Layoff

Total	mce_markernbsp;	mce_markernbsp;	mce_markernbsp;	mce_markernbsp;

Annual cost				mce_markernbsp;

Reference no: EM13100789

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