Spring and summer fashions, a clothing producer, has generated a forecast for th
ID: 467154 • Letter: S
Question
Spring and summer fashions, a clothing producer, has generated a forecast for the next eight weeks. Demand is expected to be fairly steady. except for periods 3 and 4. which have higher demands: The company typically hires seasonal workers to handle the extra workload in periods 3 and 4. The cost for hiring and training a seasonal worker is $50 pet worker, and the company plans to hire two additional workers and train them in period 3, for work in period 4, and then lay them off (no cost for off) Develop an aggregate plan that uses steady output from regular workers with added output from the two seasonal workers in period 4. The output rate for the seasonal workers is slightly less than that of regular workers. so their cost per unit is higher. The cost per unit for regular workers is $4 per hour, while cost per unit for the seasonal workers is $5 per unit Backlog cost is $1 per unit per period.Explanation / Answer
Steady production of 1,200 units is maintianed. As the production rate per worker is not given, assume that the production required in week 4 is fullfilled by 2 seasonal workers in the same week.
Period
1
2
3
4
5
6
7
8
Total
Forecast
1200
1200
1400
3000
1200
1200
1200
1200
11600
Opening Inventory
0
0
0
-200
0
0
0
-200
Steady production
1200
1200
1200
1200
1200
1200
1200
1200
9600
hiring of Seasonal worker
0
0
2
0
0
0
0
0
2
Layoff of Seasonal worker
0
0
0
0
2
0
0
0
2
Seasonal production
0
0
0
2000
0
0
0
0
2000
Ending Inventory
0
0
-200
0
0
0
0
0
-200
Actual Production
1200
1200
1200
3200
1200
1200
1200
1200
11600
Regular worker Cost ($4 per unit)
4800
4800
4800
12800
4800
4800
4800
4800
46400
Seasonal worker cost ($5 per unit)
0
0
0
10000
0
0
0
0
10000
Backlog cost ($1 per unit)
0
0
200
0
0
0
0
0
200
Hiring cost seasona worker ($50 per worker)
0
0
100
0
0
0
0
0
100
Total Cost per week
4800
4800
5000
22800
4800
4800
4800
4800
56600
Ending inventory in week 3 of -200 indicates that there is a backlog of 200 units.
Period
1
2
3
4
5
6
7
8
Total
Forecast
1200
1200
1400
3000
1200
1200
1200
1200
11600
Opening Inventory
0
0
0
-200
0
0
0
-200
Steady production
1200
1200
1200
1200
1200
1200
1200
1200
9600
hiring of Seasonal worker
0
0
2
0
0
0
0
0
2
Layoff of Seasonal worker
0
0
0
0
2
0
0
0
2
Seasonal production
0
0
0
2000
0
0
0
0
2000
Ending Inventory
0
0
-200
0
0
0
0
0
-200
Actual Production
1200
1200
1200
3200
1200
1200
1200
1200
11600
Regular worker Cost ($4 per unit)
4800
4800
4800
12800
4800
4800
4800
4800
46400
Seasonal worker cost ($5 per unit)
0
0
0
10000
0
0
0
0
10000
Backlog cost ($1 per unit)
0
0
200
0
0
0
0
0
200
Hiring cost seasona worker ($50 per worker)
0
0
100
0
0
0
0
0
100
Total Cost per week
4800
4800
5000
22800
4800
4800
4800
4800
56600
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