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Ch6hwsolutions - UTA Chapter 6 Operations Planning and...

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Unformatted text preview: UTA Chapter 6 Operations Planning and Scheduling 1. Over the past several years, many corporations have experienced reductions in the workforce of suificient size to receive attention in the media. Restructuring charges reflected in the annual reports to stockholders are often in the order of magnitude of $100,000 per employee. If business is expected to recover within a year, the company would usually be better off to keep these employees on the payroll, perhaps shifting some of them to sales, or loan othels for community volunteer work. It is difficult to estimate the monetary value of the following costs associated with layoffs: II Decreased morale and loyalty of employees not fired :I Employee stress, mortgage defaults, failed marriages, suicides 2| Customers may question the ability to perform, creating a chilling effect on sales Suppliers may become suspicious of firm’s financial strength, demand cash Loss of experience, skill and knowledge inventories Loss of goodwill in community, future cooperation in zoning Loss of redevelopment incentives Loss of reputation as an employer, future difficulty in hiring a qualified workforce I_|I_|I_||_|U 2. Responses will vary depending on which firms are used as examples. Some industries, such as the U.S. auto industry, have a long history and tradition of workforce furlough and recall to match production with demand. Generations of employees are accustomed to this cycle, and fairly smoothly transition between working in the plant during good times and finding other temporary careers when business is slow. Other industries, such as utilities, have a history of stable employment, but are now faced with competition, restructuring, and dealing with employees who hired on for life and now feel betrayed. Stable employment requires stable markets, management loyalty to the workforce, long product lifecycles, financial strength, skilled workforces, and competition that also needs stable workforces. l. Barberton Municipal Division of Road Maintenance a. The peak demand is 19,000 hours in quarter 3. As each employee can work 600 hours per quarter (500 on regular time and 100, or 0.20 x 500, on overtime), the level workforce that relies just on overtime, allows no delay, and minimizes undeitime is 19,0001’600 = 31.67 or 32 employees. Cost Calculation Amount Regular wages ($6,000 per quarter)(32}(4 quarters) $768,000 Overtime wages (3,000 hr in quarter 3)($18 per hr) 54,000 Hire costs ($3,000 per hire)(21 hires) 63,000 TOTAL $885,000 The 32 workers can produce (32)(500) = 16,000 hours of regular time in any quarter. The 19,000-hour requirement in quarter 3 exceeds this amount by 3000 hours. The total undertime hours can be calculated as: Quarter 1 32(500) — 6,000 = 10,000 hours Quarter 2 32(500) — 12,000 = 4,000 Quarte1‘4 32(500) — 9,000 = 7,000 21,000 hours b. The chase strategy: uarter Demand Ilr Workforce Hires La offs 1 6,000 12 1 2 12,000 24 12 3 19,000 38 14 4 9,000 g 0 20 TOTAL 92 27 20 Cost Calculation Amount Regular wages ($6,000 per quarter)(92) $552,000 Hire costs ($3,000 per hire)(27 hires) 81,000 Layoff costs ($2,000 per layoff)(20 layoffs) 40,000 TOTAL $673,000 0. Proposed plan This plan uses a mixed strategy. Although it uses the chase strategy for the first two quarters, it hires on 7 extra workers in Quarter 3, using 3500 hours of overtime in (the equivalent of 6.2 workers) to fill the gap. The savings in hiring and layoff costs exceeds the extra overtime costs. Quarter Demand I11' \‘Vorkforce Hires La offs Overtime 1' 1 6,000 12 1 2 1 2 ,000 24 12 3 1 9,000 3 1 7 3 ,500 4 9,000 g 0 g 0 TOTAL 85 20 13 3,500 Cost Calculation Amount Regular wages ($6,000 per quarter)(85) $510,400 Hire costs ($3,000 per hire)(20 hires) 60,000 Layoff costs ($2,000 per layoff)(13 layoff) 26,000 Overtime ($18 per hour)(3,500 hours) 63.000 TOTAL $659,000 Miehaels Distribution Center Day M T W Th F S Su Reguirements 6 3 5 3 7 2 3 W Elovee 6 3 5 3 7 E 1 5 2 4 2 6 I] 2 4 E 1 5 2 3 3 3 1 3 0 4 ' 1 2 4 2 [I 0 3 1 2 5 1 0 2 0 2 0 1 6 1 0 1 0 1 2 The number of employees is 7. The],r are scheduled to take the boxed days off. 16. Hickory Company a. Schedules for two rules FCFS rule: Hr Since Start Machine Finish Due Past Flow Customer Order Time Time Time Date Due Time Sequence Arrived (hr) (hr) (hr) (hr) (111') (hr) 1 5 fl -- 10 = 10 12 II} 16 2 5 ll] -- 3 = 13 8 5 13 3 3 l 3 + 1 5 = 28 18 llllI 31 4 l 23 -- 9 = 37" 20 17 33 5 D 37 + 7 = 44 21 23 44 Average flow time = w = 29.4 hours Average hours past due = W = 11.0 hours EDD rule: Hr Since Start Machine Finish Due HI Flow Customer Order Time Time Time Date Past Time Seguenee Arrived {hr} 5hr;- 5h_:! 5hr! Date 1hr! 2 5 D + 3 = 3 3 II} 8 l 5 3 + 10 = 13 12 l 19 3 3 l 3 + 1 5 = 28 18 llllI 31 4 l 23 + 9 = 37" 2D l".Ir 33 5 D 37 + 7 = 44 21 23 44 Average flow time = w = 28.0 hours Average hours past due = w = 10.2 hours b. The EDD rule is better than FCFS on both average flow time (28.0 vs. 29.4) and average hours past due (10.2 vs. 11.0). It gives the better schedule, although this is not always true. ...
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