Develop a production schedule to produce the exact production requirements by va

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 1,020, 1,550, 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 560 units. Manufacturing cost is $200 per unit, storage cost is $3 per unit per month, standard pay rate is $8 per hour, overtime rate is $12 per hour, cost of stockout is $10 per unit per month, hiring and training cost is $220 per worker, layoff cost is $320 per worker, and worker productivity is 0.1 unit per hour. Assume that you start off with 42 workers and that they work 8 hours per day. (Round Workers Required up to the next higher whole number. Round all other variables off to the nearest whole number. Use previous rounded answers as required to compute subsequent answers. Input all values as positive values. Leave no cells blank - be certain to enter "0" wherever required.) January February March Forecast 1,020 1,550 1,220 Safety stock Beginning inventory Net production required Workers required Hired Laid off Actual production Ending inventory January February March Labor $ $ $ Inventory Hiring Layoff Total $ $ $ Total $

**Please be detailed on how you get answers.

Explanation / Answer

January February March Forecast a 1020 1550 1220 Working Days b 22 19 21 Safety stock c = a/2 510 775 610 Beginning inventory d = j+c 560 526 784 Net production requried e = a+c-d 970 1799 1046 Workers required (Note 1) f 56 119 63 Hired (Note 1) g 14 63 0 Laid off (Note 1) h 0 0 56 Actual Production i 986 1809 1058 Ending Inventiry j 16 9 13 Total Labor Hours k = b*g*8 9856 18088 10584 January February March Manufacturing Cost - @200 per unit l = $200*i $197,120 $361,760 $211,680 Labor cost - @ $8 per hour m = $8 * k $78,848 $144,704 $84,672 Inventory cost - @ $3 on Ending Inventory m = $3*j $48 $27 $39 Hiring cost - @ $220 per labor n = $220*g $3,080 $13,860 $0 Layoff cost - @ $320 per labor o = $320*h $0 $0 $17,920 Total $81,976 $158,591 $102,631 Total $343,198 Worker Productivity - 0.1 unit per hour # Workers = 40 Work hours = 8 per day January February March Production Required a 970 1799 1046 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 56 119 63 Workforce in system f 42 56 119 Hired / (Laid Off) g=e-f 14 63 (56)

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