The Barberton Municipal division of Road Maintenance is charged with road repair
ID: 390832 • Letter: T
Question
The Barberton Municipal division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Cindy Kramer, road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Kramer estimates that the labor hours required for the next four quarters are 6,500, 13,000, 19,500, and 10,000, respectively Each of the 11 workers on the workforce can contribute 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of $18 for each overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3,000, and the cost of laying off a worker is $1,800. Subcontracting is not permitted. (Hint: When calculating the number of workers, make sure to round up to the next whole number before proceeding with any further calculations.) a. Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime can be used to its limits in any quarter. What is the total cost of the plan? $ 912000 (Enter your response as an integer.) How many undertime hours does it call for? 20000 hours. (Enter your response as an integer.) b. Use a chase strategy that varies the workforce level without using overtime or undertime. What is the total cost of this plan? Stor response as an integer.)Explanation / Answer
Total cost of Level workforce plan $912,000
Total undertime hours = 20,000 hours
b. Chase strategy where varying work-force used for different periods based on the demand forecast for that period and if the number of work force is more than required, companies used to layoff them and if the number of work force is less than required, companies used to hire them.
A Chase strategy has the total cost of plan $706,200
a. Level workforce strategy Total Cost calculation of the Plan Period Beginning 1 2 3 4 Total Labor hours required 6,500 13,000 19,500 10,000 49,000 Workers required 11 33 33 33 33 Hiring 22 0 0 0 Layoff 0 0 0 0 Total Production hours 16,500 16,500 16,500 16,500 66,000 Overtime hours 0 0 3,000 0 3,000 Undertime hours 10,000 3,500 0 6,500 20,000 Cost: Regular employees ($6000/worker) $198,000 $198,000 $198,000 $198,000 $792,000 Hiring cost ($3000/worker) $66,000 $0 $0 $0 $66,000 Layoff cost ($1800/worker) $0 $0 $0 $0 $0 Overtime cost ($18/hour) $0 $0 $54,000 $0 $54,000 Total Cost per period $264,000 $198,000 $252,000 $198,000 $912,000Related Questions
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