Sales and Operations Planning Case: The Barberton Municipal (Revisited) The Barberton Municipal Division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Vijay Gupta, road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Gupta estimates that the labor hours required for the next four quarters are 24,000, 12,000, 19,000, and 14,000, respectively. Each of the 10 workers on the workforce can contribute 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of S18 for cach overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3,000, and the cost of laying off a worker is $2,000. Subcontracting is not permitted. a. Develop a Sales and Operations plan using a chase strategy that varies the workforce level without using overtime or undertime. a. The chase strategy: Quarter Demand (hr) Workforce Hires Layoffs 4. TOTAL b. What is the total cost of this plan? Cost Calculation Amount Regular wages Hire costs Layoff costs TOTAL c. What is the total cost of this plan?
Sales and Operations Planning Case: The Barberton Municipal (Revisited) The Barberton Municipal Division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Vijay Gupta, road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Gupta estimates that the labor hours required for the next four quarters are 24,000, 12,000, 19,000, and 14,000, respectively. Each of the 10 workers on the workforce can contribute 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of S18 for cach overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3,000, and the cost of laying off a worker is $2,000. Subcontracting is not permitted. a. Develop a Sales and Operations plan using a chase strategy that varies the workforce level without using overtime or undertime. a. The chase strategy: Quarter Demand (hr) Workforce Hires Layoffs 4. TOTAL b. What is the total cost of this plan? Cost Calculation Amount Regular wages Hire costs Layoff costs TOTAL c. What is the total cost of this plan?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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Transcribed Image Text:Case 4
Sales and Operations Planning Case: The Barberton Municipal (Revisited)
The Barberton Municipal Division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Vijay Gupta,
road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Gupta estimates that
the labor hours required for the next four quarters are 24,000, 12,000, 19.000, and 14,000, respectively. Each of the 10 workers on the workforce can
contribute 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of
S18 for each overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any quarter, Although unused overtime capacity has no
cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3,000, and the cost of laying off a worker is $2,000. Subcontracting is
not permitted.
a. Develop a Sales and Operations plan using a chase strategy that varies the workforce level without using overtime or undertime.
a. The chase strategy:
Quarter
Demand (hr) Workforce
Hires
Layoffs
2
3
TOTAL
b. What is the total cost of this plan?
Cost
Calculation
Amount
Regular wages
Hire costs
Layoff costs
TOTAL
c. What is the total cost of this plan?
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