4. (20 points) The manager of a large distribution center must determine how man

Question

4. (20 points) The manager of a large distribution center must determine how many part-time stockpickers to maintain on the payroll. She wants to develop a staffing plan that minimizes total costs and wants to begin with the chase strategy. The manager divides the next year int periods, each one 2 month long. The distribution center's forecasted demand (see table below) is o six time shown as the number of part-time employees required for each time period. Period 13Total (1-6) 78 Demand Currently (period 0) 10 part-time clerks are employed. They have not been subtracted from the forecasted demand shown. Constraints and cost information are as follows: a. The number of new hires in each period is limited to 10. b. Demand must be met each period. c: Wage: $2,000 per period; Cost of hiring: $1,000 per person; Cost of layoff: $500 per person (a) Complete the table below and show the total cost of the chase strategy for the upcoming year. Period Demand Total (1-6) 78 10 12 Hirin Firing Total no. of stockpickers Ending Inventory Total cost (b) Assume that a new manager is hired to replace the original manager and the new manger would like to adopt the constant workforce strategy. All costs remain the same. (a) Complete the table below and show the total cost of the constant work force strategy for the upcoming year Period Demand Hiri 6 Total (1-6) 10 78 ng Firin Total no. of stockpickers Ending vent Total cost

Explanation / Answer

(a)

(b)

Overall net demand = 78 - 10 = 68
Average net demand for a period = 68 / 6 = 11.33 or 12

Note: Inventory carrying cost is not given and should have been given.

Period 0 1 2 3 4 5 6 Total Demand 10 6 12 18 15 13 14 78 Hiring - 0 6 6 0 0 1 13 Firing - 4 0 0 3 2 0 9 Total no. of stockpickers 10 6 12 18 15 13 14 78 Ending Inventory - 0 0 0 0 0 0 0

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