Develop a production schedule to produce the exact production requirements by va

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 1.010. 1.490. and 1, 240. 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 550 units. Storage cost is $5 per unit per month based on ending inventory level, standard pay rate is $8 per hour, hiring and training cost is $260 per worker, layoff cost is $360 per worker, and worker productivity is 0.1 unit per hour. Assume that you start off with 42 workers and that they work 8 hours per day. (Leave no cells blank - be certain to enter "0" 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.)

Explanation / Answer

no. of workers 42 no. of hours per worker per day 8 productivity per hour in units 0.1 storage cost per unit per month $5 standard pay rate per hour $8 hiring and training cost per worker $260 lay off cost per worker $360 jan fab march forecast 1010 1490 1240 safety stock 505 745 620 beginning inventory 550 0 0 net production required 965 2235 1860 workers required 55 147 111 hired 13 92 0 laid off 0 0 36 actual production 965 2235 1860 ending inventory 0 0 0 no. of working days 22 19 21 Labor cost $77,200 $178,800 $148,800 Inventory Cost $0 $0 $0 Hiring cost $3,336 $23,975 $0 Layoff cost $0 $0 $13,077 Total Cost $80,536 $202,775 $161,877 Total $445,187

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