Plan production for a four-month period february through

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Reference no: EM13382224

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.

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 $

Reference no: EM13382224

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