Develop a production schedule to produce the exact production requirements by va
ID: 1170701 • Letter: D
Question
Develop a production schedule to produce the exact production requirements by varying the workforce size for the following problem. The monthly forecasts for Product X for January, February, and March are 950, 1,540, and 1,110, respectively. Safety stock policy recommends that half of the forecast for that month be defined as safety stock. There are 22 working days in January, 19 in February, and 21 in March. Beginning inventory is 610 units. Manufacturing cost is $130 per unit, storage cost is $3 per unit per month, standard pay rate is S4 per hour, overtime rate is $6 per hour, cost of stockout is S8 per unit per month, hiring and training cost is $190 per worker, layoff cost is $290 per worker, and worker productivity is 0.1 unit per hour. Assume that you start off with 43 workers and that they work 8 hours per day. (Leave no cells blank be certain to enter "O" wherever required. Input all values as positive values. Round Workers Required up to next higher whole number. Round all other variables to nearest whole number.) January February March 950 Forecast Safety stoclk Beginning inventory Net production required Workers required Hired Laid off Actual production Ending inventory 1,540 1,110 475 610 815 47 770 487 1823 120 73 0 824 894 54 0 827 487 907 568 January February March $33,088 109,157 760 0 S 143,005 $36,288 119,920 0 15,660 $171,868 $ 640,710 $ 72,960 Labor Inventory Hiring Layoff Total 239,007 13,870 0 325,837 TotalExplanation / Answer
Inventory Cost = Cost of ordering + cost of carry + cost of shortage
since there is no storage ordering cost is given and shortage is zero then
Inventory cost = cost of carry
= 3* 487
= $1461
Similarly for next two months will be equal to $2313 & $1704
Cost of layoff = 66*290 = $19140
total for each month will be as follows:
Jan: $35309
Feb: $89143
March: $57132
Total = $181584
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