Develop a production schedule to produce the exact production requirements by va
ID: 454434 • Letter: D
Question
Develop a production schedule to produce the exact production requirements by varying the workforce size for the following problem.
The monthly forecasts for Product X for January, February, and March are 950, 1,510, and 1,220, respectively. Safety stock policy recommends that half of the forecast for that month be defined as safety stock. There are 22 working days in January, 19 in February, and 21 in March. Beginning inventory is 550 units.
Storage cost is $4 per unit per month based on ending inventory level, standard pay rate is $7 per hour, hiring and training cost is $190 per worker, layoff cost is $290 per worker, and worker productivity is 0.1 unit per hour. Assume that you start off with 40 workers and that they work 8 hours per day. (Leave no cells blank - be certain to enter "0" wherever required. Input all values as positive values. Round Workers Required up to next higher whole number. Round all other variables to nearest whole number.)
Develop a production schedule to produce the exact production requirements by varying the workforce size for the following problem.
The monthly forecasts for Product X for January, February, and March are 950, 1,510, and 1,220, respectively. Safety stock policy recommends that half of the forecast for that month be defined as safety stock. There are 22 working days in January, 19 in February, and 21 in March. Beginning inventory is 550 units.
Storage cost is $4 per unit per month based on ending inventory level, standard pay rate is $7 per hour, hiring and training cost is $190 per worker, layoff cost is $290 per worker, and worker productivity is 0.1 unit per hour. Assume that you start off with 40 workers and that they work 8 hours per day. (Leave no cells blank - be certain to enter "0" wherever required. Input all values as positive values. Round Workers Required up to next higher whole number. Round all other variables to nearest whole number.)
Explanation / Answer
January February March Forecast a 950 1510 1220 Working Days b 22 19 21 Safety stock c = a/2 475 755 610 Beginning inventory d = j+c 550 480 764 Net production requried e = a+c-d 875 1785 1066 Workers required (Note 1) f 50 118 64 Hired (Note 1) g 10 68 0 Laid off (Note 1) h 0 0 54 Actual Production i 880 1794 1075 Ending Inventiry j 5 9 9 Total Labor Hours k = b*g*8 8800 17936 10752 January February March Labor cost - @ $7 per hour l = $7 * k $61,600 $125,552 $75,264 Inventory cost - @ $4 on Ending Inventory m = $4*j $20 $36 $36 Hiring cost - @ $190 per labor n = $190*g $1,900 $12,920 $0 Layoff cost - @ $290 per labor o = $290*h $0 $0 $15,660 Total $63,520 $138,508 $90,960 Total $292,988 Worker Productivity - 0.1 unit per hour # Workers = 40 Work hours = 8 per day January February March Production Required a 875 1785 1066.4 Labor Productivity per labor per day (8*0.1) b 0.8 0.8 0.8 # days c 22 19 21 Monthly Productivity per Labor d = b*c 17.6 15.2 16.8 Workers Required e = a/d 50 118 64 Workforce in system f 40 50 118 Hired / (Laid Off) g=e-f 10 68 (54)
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