Helter Industries, a company that produces a line of women\'s bathing suits, hir

Question

Helter Industries, a company that produces a line of women's bathing suits, hires temporaries to help produce its summer product demand. For the current four-month rolling schedule, there are 12 full-time employees on staff. Temps can be hired when needed and can be used as needed on a month-by-month basis, whereas the full-time employees must be paid whether they are needed on not. Each full-time employee can produce 206 suits, while each temporary employee can produce 166 suits per month. Demand for bathing suits for the next four months is as follows: AUGUST 2,960 3,160 2,760 3,060 Beginning inventory in May is 403 complete (a complete two-piece includes both top and bottom) bathing suits. Bathing suits cost $35 to produce and carrying cost is 24 percent per year Develop an aggregate plan that uses the 12 full-time employees each month and a minimum number of temporary employees. Assume that all employees will produce at their full potential each month. Calculate the inventory carrying cost associated with your plan using planned end of month levels. (Round "Inventory cost" to 2 decimal places.) May June July August Forecast Beginning inventory Production required Regular workforce Regular production Temp workforce Temp production Total production Ending inventory Inventory cost 3,160 2,760 3,060 2,960

Explanation / Answer

May June July August a. Forecast         3,160         2,760         3,060           2,960 b. Beginning inventory             403               47               91                    1 c. Production required (a - b)         2,757         2,713         2,969           2,959 d. Regular workforce               12               12               12                 12 e. Regular production (206 X 12)         2,472         2,472         2,472           2,472 f. Temp workforce                 2                 2                 3                    3 g. Temp production (f X 166)             332             332             498               498 h. Total production (e + g)         2,804         2,804         2,970           2,970 i. Ending inventory (h - c)               47               91                 1                 11 j. Inventory cost ($35 X 0.24) X i $ 394.80 $ 764.40 $ 8.40 $       92.40 $ 1,260.00 Calculation of temporary workforce May June July August 1 Production required         2,757         2,713         2,969           2,959 2 Regular production         2,472         2,472         2,472           2,472 3 More suitss required to be produced (1-2)             285             241             497               487 4 suits produced by 1 temporary workforce             166             166             166               166 (3 / 4) 1.72 1.45 2.99 2.93 Temporary workforce required (Rounoff to upperside) 2 2 3 3

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