Question

Problem 13-12

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $2,150 per month. An employee can only work a maximum of 150 hours per month because production normally takes place at night. They do receive $2,150 even if they do not work 150 hours, however. Part-time employees can be hired at a cost of $90 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows:

Problem 13-12

Dave's Stove-Top Popcorn currently has three full-time employees who are each paid $2,150 per month. An employee can only work a maximum of 150 hours per month because production normally takes place at night. They do receive $2,150 even if they do not work 150 hours, however. Part-time employees can be hired at a cost of $90 per hour. Dave's Stove-Top Popcorn has forecasted that demand for the next six months will be as follows:

Month	1	2	3	4	5	6
Hours	470	380	470	420	570	150

a-1. Develop a production plan if Dave relies on part-time employees to meet additional demand? (Leave no cells blank - be certain to enter "0" wherever required.)

a-2. What is the total cost if Dave relies on part-time employees to meet additional demand?

b-1. Develop a production plan if Dave hires one more full-time employee to meet additional demand? (Leave no cells blank - be certain to enter "0" wherever required.)

b-2. What is the total cost if Dave hires one more full-time employee to meet additional demand?

Month	1	2	3	4	5	6
Hours	470	380	470	420	570	150

Answer 1

The Production Plan for the case when the additional demand is fulfilled using part time employees is-

The Total Cost over the six months is = 53100

The Production Plan for the case when the additional demand is fulfilled using one Full time employees is-

The Total Cost over the six months is= 51600

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