Plan production for a four-month period (February through May). Given information:For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workersneeded for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March).If demand exceeds supply, then backorders occur.There are 100 workers on January 31.You are given the following demand forecast: February, 80,000; March, 64,000; April, 100,000; May, 40,000.Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1.Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit.

Аggregаte рlаnning refers tо the рrосess оf develорing аnd mаintаining аn аggregаte…

Answered: Plan production for a four-month period…

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Plan production for a four-month period (February through May).

Given information:

For February and March, you should produce to exact demand forecast.
For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workersneeded for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March).
If demand exceeds supply, then backorders occur.
There are 100 workers on January 31.
You are given the following demand forecast: February, 80,000; March, 64,000; April, 100,000; May, 40,000.
Productivity is four units per worker hour, eight hours per day, 20 days per month.
Assume zero inventory on February 1.
Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit.