Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 80,256; March, 70,400; April, 100,360; May, 40,360. Productivity is four units per worker hour, eight hours per day, 22 days per month. Assume zero inventory on February 1. Costs are: hiring, $45 per new worker, layoff, $65 per worker laid off, inventory holding, $10 per unit-month; regular time labor, $10 per hour, overtime, $15 per hour, backorder, $20 per unit.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Plan production for a four-month period: February through May. For February and March, you should produce to exact demand
forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers.
needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime
labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are
100 workers on January 31. You are given the following demand forecast: February, 80,256; March, 70,400; April, 100,360; May,
40,360. Productivity is four units per worker hour, eight hours per day, 22 days per month. Assume zero inventory on February 1. Costs
are: hiring, $45 per new worker; layoff, $65 per worker laid off, inventory holding, $10 per unit-month; regular time labor, $10 per hour;
overtime, $15 per hour, backorder, $20 per unit.
Develop a production plan and calculate the total cost of this plan. Note: Assume any layoffs occur at beginning of next month.
Note: Leave the cells blank, whenever zero (0) is required. Negative values should be indicated by a minus sign. Round your
answers to the nearest whole number.
Transcribed Image Text:Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers. needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 80,256; March, 70,400; April, 100,360; May, 40,360. Productivity is four units per worker hour, eight hours per day, 22 days per month. Assume zero inventory on February 1. Costs are: hiring, $45 per new worker; layoff, $65 per worker laid off, inventory holding, $10 per unit-month; regular time labor, $10 per hour; overtime, $15 per hour, backorder, $20 per unit. Develop a production plan and calculate the total cost of this plan. Note: Assume any layoffs occur at beginning of next month. Note: Leave the cells blank, whenever zero (0) is required. Negative values should be indicated by a minus sign. Round your answers to the nearest whole number.
Forecast
Beginning inventory
Production required
Production hours required
Loca
Regular workforce
www.amamm
Regular production
P
Overtime hours
Overtime production
Total production
Ending inventory
backord
Ending backorders
Workers hired
Workers laid off
Regular time
Overtime
Inventory
Backorder
February
Hiring
Layoff
Total
Total cost
February
80,256
$
March
February
March
Show Transcribed Text
70,400
0 $
April
April
March
100,360
May
0 $
April
May
40,360
0 $
$
May
0
0
Transcribed Image Text:Forecast Beginning inventory Production required Production hours required Loca Regular workforce www.amamm Regular production P Overtime hours Overtime production Total production Ending inventory backord Ending backorders Workers hired Workers laid off Regular time Overtime Inventory Backorder February Hiring Layoff Total Total cost February 80,256 $ March February March Show Transcribed Text 70,400 0 $ April April March 100,360 May 0 $ April May 40,360 0 $ $ May 0 0
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