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 7,000​, 13,000​, 19,000​, 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 $17 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 $3,500​, and the cost of laying off a worker is $2,000. 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?

.

​(Enter your response as an​ integer.)

How many undertime hours does it call​ for?

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?

.

​(Enter your response as an​ integer.)

c. Consider the following proposed​ plan, for a different demand​ schedule, that combines the strategy of​ hiring, layoffs, and utilizing overtime. Payroll costs are 6,000 in wages per worker for regular time​ worked, with an overtime pay rate of$17 for each overtime hour. The cost of hiring a worker is $3,800​, and the cost of laying off a worker is $2,000.The total cost for this plan would be

​(Enter your response as an​ integer.)

Answer 1

EXCEL SOLUTION-

11 Number of workers Overtime pay rate (per overtime hrs) Cost of hiring Cost of laying off Workers hrs by each worker $18 $3,200 $1,300 $500 33 33 Forecasted demand (labor hrs) Workforce level Total hrs by worforce Unutilized regular hrs Hires Quarter 1 Quarter 2 Quarter 3 Quarter 4 7000 12500 19500 10000 33 33 16500 16500 16500 16500 9500 4000 -3000 6500 - 22 22 22 22 0 0 0 0 Fires Costs Utilized time Undertime Overtime Hire Cost Fire Cost 198000 0 $0 $70,400 198000 198000 198000 792000 0 0 0 0 0 $54,000 0 $54,000 70400 0 000 voslan Total cost of level plan 916400