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Operations Management
COSTS Holding cost Subcontracting Regular-time labor Overtime labor $8/disk/month $80/disk $12/hour $18/hour for hours above 8 hours/worker/day Hiring cost $40/worker Layoff cost $80/worker DEMAND* July Aug Sept. Oct. 700 Nov. Dec. 400m500 550 800 700 *No costs are incurred for unmet demand, but unmet demand (back- orders) must be handled in the following period. If half or more of a worker is needed, round up. OTHER DATA Current workforce (June) 8 people Labor-hours/disk 4 hours Workdays/month Beginning inventory No requirement for ending inventory 20 days 150 disks** O disks

COSTS Holding cost Subcontracting Regular-time labor Overtime labor $8/disk/month $80/disk $12/hour $18/hour for hours above 8 hours/worker/day Hiring cost $40/worker Layoff cost $80/worker DEMAND* July Aug Sept. Oct. 700 Nov. Dec. 400m500 550 800 700 *No costs are incurred for unmet demand, but unmet demand (back- orders) must be handled in the following period. If half or more of a worker is needed, round up. OTHER DATA Current workforce (June) 8 people Labor-hours/disk 4 hours Workdays/month Beginning inventory No requirement for ending inventory 20 days 150 disks** O disks

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Consuela Chua, Inc., is a disk drive manufacturer in need of an aggregate plan for July through December. The company has gathered the following data:                                                                                                                  What will each of the two fo llowing strategies cost?
a) Vary the workforce so that production meets demand. Chua
had eight workers on board in June.
b) Vary overtime only and use a constant workforce of eight.
COSTS Holding cost Subcontracting Regular-time labor Overtime labor $8/disk/month $80/disk $12/hour $18/hour for hours above 8 hours/worker/day Hiring cost $40/worker Layoff cost $80/worker DEMAND* July Aug Sept. Oct. 700 Nov. Dec. 400m500 550 800 700 *No costs are incurred for unmet demand, but unmet demand (back- orders) must be handled in the following period. If half or more of a worker is needed, round up. OTHER DATA Current workforce (June) 8 people Labor-hours/disk 4 hours Workdays/month Beginning inventory No requirement for ending inventory 20 days 150 disks** O disks
Transcribed Image Text:COSTS Holding cost Subcontracting Regular-time labor Overtime labor $8/disk/month $80/disk $12/hour $18/hour for hours above 8 hours/worker/day Hiring cost $40/worker Layoff cost $80/worker DEMAND* July Aug Sept. Oct. 700 Nov. Dec. 400m500 550 800 700 *No costs are incurred for unmet demand, but unmet demand (back- orders) must be handled in the following period. If half or more of a worker is needed, round up. OTHER DATA Current workforce (June) 8 people Labor-hours/disk 4 hours Workdays/month Beginning inventory No requirement for ending inventory 20 days 150 disks** O disks
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