Question

The current aggregate demand requirements for a firm are shown below for the next six months: Month May June July Aug Sept Oct Demand 230 210 210 210 240 260 PpictureClick here for the Excel Data File ped The firm always plans to meet all demand. The firm currently has 230 workers capable of producing 230 units in a month (1 unit/worker). The workforce can be increased (at a cost of $500 per worker) or decreased (at a cost of $1.000 per worker). Inventory holding cost is $150 per unit per month. The firm currently has 30 units of inventory on hand, and it would like to have 30 units available at the end of each month. Regular production cost is $3,550 per unit. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month. Ook Mint nint a. Develop an aggregate plan using a chase strategy, hiring and laying off as necessary, and carrying only the minimum safety stock in inventory. (Leave no cells blank-be certain to enter "O" wherever required.) erences Regular Production Number of Workers Ending Inventory Month Demand Fire Hire May June July August September 230 230 210 210 210 210 210 210 240 240 260 260 October 1,360 0 Total 0 1,380

Answer 1

b. For Cost of Plan 230 Regular Ending No. of Month Demand Production Inventory Workers Hire Fire May 230 230 June 210 210 210 - 20 (above 230 - 210) July 210 210 210 - August 210 210 210 - September 240 240 30 - 240 (-) above 210 October 260 260 30 260 20 - 260 (-) above 240 Total 1,360 1,360 Increase in Decrease in Total for Cost of Plan Work Force Work Force Month 8,16,500 8,16,500 7,45,500 20,000 7,65,500 7,45,500 7,45,500 7,45,500 7,45,500 8,52,000 15,000 8,67,000 9,23,000 10,000 9,33,000 48,28,000 25,000 20,000 48,73,000 Regular Hired Fired Production Workers * Workers * * 3550 500 1000 240 Cost of Plan = 48,73,000 Assuming that fired workers are to be awarded $1000 for being laid off