Q. Jack is concerned about his company’s corporate image and has decided against using hires and fires. Instead, he has asked you to consider a chase aggregate plan using the current workforce supplemented by either overtime or undertime to change capacity to match demand exactly. He has asked for the following information from you: (a) How many production hours would be required each period to produce the exact quantity needed? (b) How many regular-time production hours are available each period? (c) How many overtime production hours would be needed each period? (d) Show what would happen if this plan were implemented. (e) Calculate the costs associated with this plan. (f) Evaluate the plan in terms of cost, customer service, operations, and human resources. (g) Compare this chase strategy with level strategy and conclude which is better.
Q. Jack is concerned about his company’s corporate image and has decided against using hires and fires. Instead, he has asked you to consider a chase aggregate plan using the current workforce supplemented by either overtime or undertime to change capacity to match demand exactly. He has asked for the following information from you: (a) How many production hours would be required each period to produce the exact quantity needed? (b) How many regular-time production hours are available each period? (c) How many overtime production hours would be needed each period? (d) Show what would happen if this plan were implemented. (e) Calculate the costs associated with this plan. (f) Evaluate the plan in terms of cost, customer service, operations, and human resources. (g) Compare this chase strategy with level strategy and conclude which is better.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q. Jack is concerned about his company’s corporate image and has decided against using hires and fires. Instead, he has asked you to consider a chase aggregate plan using the current workforce supplemented by either overtime or undertime to change capacity to match demand exactly. He has asked for the following information from you:
(a) How many production hours would be required each period to produce the exact quantity needed?
(b) How many regular-time production hours are available each period?
(c) How many overtime production hours would be needed each period?
(d) Show what would happen if this plan were implemented.
(e) Calculate the costs associated with this plan.
(f) Evaluate the plan in terms of cost, customer service, operations, and human resources.
(g) Compare this chase strategy with level strategy and conclude which is better.
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Problem Data
Cost data
Regular-time labor cost per hour
Overtime labor cost per hour
Subcontracting cost per unit (labor only)
Holding cost per unit per period
Back-order cost per unit per period
Hiring cost per employee
Firing cost per employee
$10.00
$15.00
$84.00
$10.00
$20.00
$600.00
$450.00
Capacity data
Beginning workforce
Beginning inventory
Labor standard per unit
Regular time available per period
Overtime available per period
Subcontracting maximum per period
Subcontracting minimum per period
210 employees
400 units
6 hours
160 hours
32 hours
1000 units
500 units
Demand data
Period 1
6000 units
Period 2
4800 units
Period 3
7840 units
Period 4
5200 units
Period 5
6560 units
Period 6
3600 units
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