Reference no: EM132248268
Mr. Meadows Cookie Company (MCC) makes a variety of chocolate chip cookies in a certain plant. Based on orders received and forecasts of buying habits, it is estimated that the demand for the next four months is 850, 1260, 510, and 980, expressed in thousands of cookies. During a 46-day period when there were 120 workers, the company produced 1.7 million cookies. Assume that the number of workdays over the four months is respectively 26, 24, 20, and 16. There are currently 100 workers employed, and there is no starting inventory of cookies.
What is the minimum constant workforce required to meet demand over the next four months with no shortages?
Assume holding cost per unit per month = 10 cents per cookie per month, hiring cost per worker = $100, and firing cost per worker = $200, evaluate the cost of the level strategy plan with a constant workforce as derived in part (a).
Determine the chase demand plan (i.e. the zero inventory plan) that hires and fires workers each month to match demand as closely as possible and the cost of that plan.