ng labor or $80/disk $12/hour $18/hour for hours $40/worker $80/worker
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
13.7 ANSWER A AND B

Transcribed Image Text:...13.7 Consuelo Chua, Inc., is a disk drive manufacturer in
need of an aggregate plan for July through December. The com-
pany has gathered the following data:
COSTS
$8/disk/month
Holding cost
Subcontracting
$80/disk
Regular-time labor
$12/hour
Overtime labor
$18/hour for hours above 8 hours/worker/day
Hiring cost
$40/worker
Layoff cost
$80/worker
DEMAND*
July
400
Aug.
500
Sept.
550
Oct.
700
Nov.
800
Dec.
700
*No costs are incurred for unmet demand, but
unmet demand (backorders) must be handled
in the following period. If half or more of a
worker is needed, round up.

Transcribed Image Text:OTHER DATA
Current workforce (June)
Labor-hours/disk
Workdays/month
20 days
Beginning inventory
150 disks**
No requirement for ending inventory
O disks
**Note that there is no holding cost for June.
What will each of the two following strategies cost?
a) Vary the workforce so that production meets demand. Chua
had eight workers on board in June.
b) Vary overtime only and use a constant workforce of eight. Px
8 people
4 hours
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