Reference no: EM133166187
A retailer experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow.
|
Period
|
1
|
2
|
3
|
4
|
5
|
6
|
|
Requirement
|
7
|
8
|
9
|
11
|
12
|
7
|
Costs associated with operations are as follows:
Wages = $2,000 per worker per month
Hiring cost = $1,000 per worker
Layoff cost = $1,500 per worker
The current workforce level is 10 workers. Use the spreadsheet approach and the preceding data to answer the following questions:
a. What is the total cost of a staffing plan, including the cost of regular wages, hiring, and layoffs using a chase strategy with hiring and layoffs, but no overtime?
b. What is the total cost of the staffing plan, using a level strategy in which no overtime is allowed and the undertime paid for?
c. Suppose that overtime is allowed up to 25% of the regular-time capacity, and that overtime wages are 150% of the regular-time rate. What is the total cost of the level strategy with overtime and undertime that also minimizes undertime?