Please show all working out to questions. A company has predicted the following

Question

Please show all working out to questions. A company has predicted the following demands for the next six months: Month 1 2 3 4 5 6 Total De- 15,000 18,000 15,000 20,000 22,000 24,000 114,000 mand A single worker working for one month can produce 125 units. The beginning workforce is 50 workers. It costs the company $1500 to hire one worker, and it costs the com pany $2500 to lay off a worker. The cost to carry an item is $15 per unit per month. The stockout cost is estimated to be $40 per unit. Develop a chase sales and operations plan for this firm. Develop the monthly production schedule and show the labor workforce and inventory levels. Finally, compute the cost of the plan.

Explanation / Answer

Month 1- Demand=15,000.Manpower needed=15,000/125=120. Hiring=120-50=70 employees. Hiring cost= 70*1500=$105,000.

Month2- Demand=18,000.Manpower needed=18,000/125=144. Hiring=144-120=24 employees, Hiring cost = 24 * 1500 =$36,000.

Month 3- Demand=15,000.Manpower needed=15,000/125=120. Hiring=0. Hiring cost=0. Production=125*144=18000. Inventory=18000-15000=3,000, inventory carrying cost=3000*15=$45,000.

Month 4- Demand=20,000.Manpower needed=20,000/125=160. Hiring=160-144=16 employee. Hiring cost=16*1500=$24,000.

Month 5-  Demand=22,000.Manpower needed=22,000/125=176. Hiring=176-160=16employee. Hiring cost=16*1500=$24,000.

Month 6-  Demand=24,000.Manpower needed=24,000/125=192. Hiring=192-176=16employee. Hiring cost=16*1500=$24,000.

Cost of the plan= $105,000.+$36,000.+$45,000+$24,000+$24,000.+$24,000.=$258,000

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