Question

A company believes that its demand for the next six months is as follows ota ont eman The output per worker per month is 100 units. The per worker hiring and lay off costs are $1,500 and $3,500, respectively. There is no beginning inventory, and the starting workforce is 135. It cost the company $25 to carry an item in inventory each month, and the stockout costs is estimated to be $25 per unit. Develop a level sales and operations plan for this firm. Develop the monthly production schedule and show the labor workforce and inventory levels. Finally, compute the cost of the plan Construct the production table. Note that a negative beginning inventory denotes a stockout that is carried forward (enter your responses as whole numbers) Beginning Production Inventory Inventory Ending Month 1 2 Demand 8,000 7,000 Stockouts 9,500 □ □ □ □ 17,000 11,000 11,500 □ □ 4 6 Construct the labor table. Note that at the start of the planning process 135 workers are employed (enter your responses as whole numbers.) Workers required Hires Layoffs Month 2 4 The total plan cost is S (Enter your response as a whole number)

Answer 1

Production Table

Month	Demand	Beginning inventory	Production	Ending Inventory	Stockout
1	8000	0	9000	1000	0
2	7000	1000	9000	3000	0
3	9500	3000	9000	2500	0
4	7000	2500	9000	4500	0
5	11000	4500	9000	2500	0
6	11500	2500	9000	0	0
Total	54000		54000	13500	0

Labour table

Month	Workers required	Hire	Layoff
1	90	0	45
2	90	0	0
3	90	0	0
4	90	0	0
5	90	0	0
6	90	0	0

Total plan cost = Inventory holding cost + Stock out cost + Hiring cost + layoff cost

= 13500*25 + 0*25 + 0*1500 + 45*3500

= 495000