Simply develop and solve a model that can be used to determine the number of temporary employees Davis should hire each month under each contract plan in order to meet the projected needs at a minimum total cost.
Problem 4 WORKFORCE
Davis Instruments has two manufacturing plants located in Atlanta, Georgia. Product demand varies considerably from month to month, causing Davis extreme difficulty in workforce scheduling. Recently Davis started hiring temporary workers supplied by WorkForce Unlimited, a company that specializes in providing temporary employees for firms in the greater Atlanta area. WorkForce Unlimited offered to provide temporary employees under three contract options that differ in terms of the length of employment and the cost. The three options are summarized:
Option Length of Employment
|
|
One month |
$2000 |
|
2 |
Two months |
S4800 |
|
3 |
Three months |
$7500 |
The longer contract periods are more expensive because WorkForce Unlimited experiences greater difficulty finding temporary workers who are willing to commit to longer work assignments.
Over the next six months, Davis projects the following needs for additional employees:
|
Month |
January |
February |
March |
April |
May |
June |
|
Employees Needed |
10 |
23 |
19 |
26 |
20 |
14 |
Each month, Davis can hire as many temporary employees as needed under each of the three options. For instance, if Davis hires five employees in January under Option 2, WorkForce Unlimited will supply Davis with five temporary workers who will work for two months: January and February. For these workers, Davis will have to pay 5($4800) = $24,000. Because of some merger negotiations under way, Davis does not want to commit to any contractual obligations for temporary employees that extend beyond June.
Davis's quality control program requires each temporary employee to receive training at the time Of hire. The training program is required even if the person worked for Davis Instruments in the past. Davis estimates that the cost of training is $875 each time a temporary employee is hired. Thus, if a temporary employee is hired for one month, Davis will incur a training cost of $875, but will incur no additional training cost if the employee is on a two- or three-month contract.
Simply develop and solve a model that can be used to determine the number of temporary employees Davis should hire each month under each contract plan in order to meet the projected needs at a minimum total cost.
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