Question

The washing machine plant is interested in determining work force and production levels for the next 8  months. Forecasted demands for Jan‐Aug. are: 420, 280, 460, 190, 310, 145, 110, 125. Starting inventory  at the end of December is 200. The firm would like to have 100 units on hand at the end of August.  Suppose we are told that over a period of 40 days, the plant had 38 workers who produced 520 units.  Assume we are given the following number of working days per month (January to August): 22, 16, 23,  20, 21, 22, 21, 22. The holding cost (per unit per month): $8.50, hiring cost per worker: $800, firing cost  per worker: $1,250, payroll cost: $75/worker/day, and shortage cost: $50 unit short/month. The  company has 40 workers at the end of December.     We solved this problem in class and obtained a value of K = 0.3421 units/worker/day. In addition, we  developed a constant workforce plan with 46 workers over the planning horizon and estimated the total  cost of the plan to be $599,590.50. We discussed that the cost is very high due to the high inventory  level. Hence, we decided to reduce the workforce to reduce the production and the unneeded  inventory.     Develop a production plan with constant workforce over January to March, reduce it to be constant over  April and May, and finally reduce it again to be constant over June to August without any shortage of  demand. Estimate the workforce levels over these three periods and the new total cost of the  developed plan.  

Answer 1

Production plan with constant workforce over January to March, reduce it to be constant over April and May, and finally reduce it again to be constant over June to August without any shortage of  demand

is as follows:

EXCEL FORMULA: