The Barberton Municipal Division of Road Maintenance is charged with road repair
ID: 435037 • Letter: T
Question
The Barberton Municipal Division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Cindy Kramer, road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city bud- get. Kramer estimates that the labor hours required for the next four quarters are 6,000, 12,000, 19,000, and 9,000 respectively. Each of the 11 workers on the workforce can contribute 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of $18 for each overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3,000, and the cost of laying off a worker is $2,000. Subcontract- ing is not permitted. a. Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime can be used to its limits in any quarter. What is the total cost of the plan and how many undertime hours does it call for? b. Use a chase strategy that varies the workforce level without using overtime or undertime. What is the total cost of this plan? Propose a plan of your own. Compare your plan with those in part (a) and part (b) and discuss its compara- c.Explanation / Answer
Answer A:-
Quarter
1
2
3
4
Total
Forecasted demand (hrs)
6,000
12,000
19,000
9,000
46,000
Workforce level (workers)
12
24
37
18
91
Undertime (hours)
240
480
240
360
1,320
Overtime (hours)
0
0
0
0
0
Utilized time (hours)
6,000
12,000
19,000
9,000
46,000
Hires (workers)
1
12
13
0
26
Layoffs (workers)
0
0
0
19
19
What is the total cost of this plan?
Costs
Utilized time
$72,000
$144,000
$228,000
$108,000
$552,000
Undertime
2,880
5,760
2,880
4,320
15,840
Overtime
0
0
0
0
0
Hires
3,000
36,000
39,000
0
78,000
Layoffs
0
0
0
38,000
38,000
Total Cost =
$683,840
Answer B:-
Find a level-utilization plan for the Barberton Municipal Division that allows no delay in road repair and minimizes undertime. Overtime can be used to its limits in any quarter. Given that the demand peaks in quarter 3, we get:
1.20w = 19000/520 = 36.54 employee-period equivalents
w = 30.45 or 31 employees
Quarter
1
2
3
4
Total
Forecasted demand (hrs)
6,000
12,000
19,000
9,000
46,000
Workforce level (workers)
31
31
31
31
124
Undertime (hours)
10,120
4,120
0
7,120
21,360
Overtime (hours)
0
0
2,880
0
2,880
Utilized time (hours)
6,000
12,000
16,120
9,000
43,120
Hires (workers)
20
0
0
0
20
Layoffs (workers)
0
0
0
0
0
Quarter
1
2
3
4
Total
Forecasted demand (hrs)
6,000
12,000
19,000
9,000
46,000
Workforce level (workers)
12
24
31
18
85
Undertime (hours)
240
480
0
360
1,080
Overtime (hours)
0
0
2,880
0
2,880
Utilized time (hours)
6,000
12,000
16,120
9,000
43,120
Hires (workers)
1
12
7
0
20
Layoffs (workers)
0
0
0
13
13
Several solutions are possible. The key idea in creating this one is hiring only 7 employees in quarter 3, while using overtime to its maximum limit and eliminating undertime for that quarter. Hiring fewer in quarter 3 allows the number of layoffs in quarter 4 to drop to only 13, down from 19.
What is the cost of your mixed strategy plan?
Costs
Utilized time
$72,000
$144,000
$193,440
$108,000
$517,440
Undertime
2,880
5,760
0
4,320
12,960
Overtime
0
0
51,840
0
51,840
Hires
3,000
36,000
21,000
0
60,000
Layoffs
0
0
0
26,000
26,000
Total Cost =
$668,240
(students complete highlighted sections)
What is the cost of this level-utilization workforce plan?
Costs
Utilized time
$72,000
$144,000
$193,440
$108,000
$517,440
Undertime
121,440
49,440
0
85,440
256,320
Overtime
0
0
51,840
0
51,840
Hires
60,000
0
0
0
60,000
Layoffs
0
0
0
0
0
Total Cost =
$885,600
Quarter
1
2
3
4
Total
Forecasted demand (hrs)
6,000
12,000
19,000
9,000
46,000
Workforce level (workers)
12
24
37
18
91
Undertime (hours)
240
480
240
360
1,320
Overtime (hours)
0
0
0
0
0
Utilized time (hours)
6,000
12,000
19,000
9,000
46,000
Hires (workers)
1
12
13
0
26
Layoffs (workers)
0
0
0
19
19
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