The net cost of a level strategy which pays overtime and as

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Reference no: EM13394678

Tiger Toys is a retailer in Omaha, Nebraska. Business is seasonal for Tiger Toys. The following table shows labor requirements over a typical six-month period (expressed as number of employees). Undertime is paid and we also know the following rates:

Wages per month per worker:	$800
Hiring cost per worker	$300
Layoff cost per worker	$200
Overtime rate	150% of the regular rate

Overtime is allowed up to 20% of the regular time

	Month
	1	2	3	4	5	6	Total

Forecasted demand	6	7	12	13	8	5
Workforce level
Undertime
Overtime
Productive time
Hires
Layoffs
Costs
Productive time
Undertime
Overtime
Hires
Layoffs

The total cost of a level strategy which pays overtime and also minimizes the costs is:

A) Less than or equal to $57,000

B) More than $57,000 but less than or equal to $58,000

C) More than $58,000 but less than or equal to $59,000

D) More than $59,000

Reference no: EM13394678

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