Hires seasonal workers to handle the extra workload

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Reference no: EM131128720

Spring and Summer Fashions, a clothing producer, has generated a forecast for the next eight weeks. Demand is expected to be fairly steady, except for periods 3 and 4, which have higher demands.

Period 1 2 3 4 5 6 7 8 Total

Forecast 1200 1200 1400 3000 1200 1200 1200 1200 11600

The company typically hires seasonal workers to handle the extra workload in periods 3 and 4. The cost for hiring and training a seasonal working is $50 per working, and the company plans to hire two additional workers and train them in period 3, for work in period 4, and then lay them off (no cost for layoff). Develop an aggregate plan that uses steady output from regular workers with added output from the two seasonal workers in period 4. The output rate for the seasonal workers is slightly less than that of regular workers, so their cost per unit is higher. The cost per unit for regular workers is $4 per hour, while cost per unit for the seasonal workers is $5 per unit. Backlog cost is $1 per unit, per period.

Reference no: EM131128720

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