Thedemandforthenext12monthsisgiveninthefollowingtable

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Unformatted text preview: ontribute 162 hours per month, so each employee can produce about 162 / 20 = 8.1 units per month on average. Estimates indicate that it costs $300 to hire an employee and $400 to lay off an employee. At least 1000 units should be available as work­in­process inventory and safety stock, and this amount will be on hand at the start of the planning horizon. It costs $6 per month to hold a unit in inventory. The demand for the next 12 months is given in the following table. DEMAND DEMAND Months 1 2 3 4 5 6 7 8 9 0 11 12 Forecast Assume that the company begins the planning year with a work­force of 1,600 250, and that employees are paid $18 1,400 per hour 1,200 1,000 Consider the following strategies: 1,500 chase strategy 2,000 level strategy with WF level of 250 2,500 mixed strategy with WF level of 2,500 201 employees for the first 5 months, 3,000 then 285 employees afterwards 3,000 2,500 2,100 CHASE STRATEGY CHASE STRATEGY Months Req.Prod 1 2 3 4 5 6 7 8 9 10 11 12 Req. WF Change in WF Fin. Inv. Inv. Cost Cost H/F 1,600 1,400 1,200 1,000 1,500 2,000 2,500 2,500 3,000 3,000 2,500 2,100 198 173 148 123 186 247 308 309 370 371 308 259 -52 -25 -25 -25 63 61 61 1 61 1 -63 -49 -9 1,003.8 1,005.1 1,003.9 1,000.2 1,006.8 1,007.5 1,002.3 1,005.2 1,002.2 1,007.3 1,002.1 1,000.0 $6,022.8 $6,030.6 $6,023.4 $6,001.2 $6,040.8 $6,045.0 $6,013.8 $6,031.2 $6,013.2 $6,043.8 $6,012.6 $6,000.0 $20,800 $10,000 $10,000 $10,000 $18,900 $18,300 $18,300 $300 $18,300 $300 $25,200 $19,600 $3,600 24,300 3,000 12,046.4 $72,278.4 $173,600 Fin. Inv. = (198 x 8.1) + 1000 – 1600 = 1003.8 units LEVEL STRATEGY LEVEL STRATEGY Fin. Inv. Cost Inv. Months D Prod. 1 2 3 4 5 6 7 8 9 10 11 12 1,600 1,400 1,200 1,000 1,500 2,000 2,500 2,500 3,000 3,000 2,500 2,1...
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