Answered: The management of Swift Company has…

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

The management of Swift Company has determined the aggregated demand schedule in the following units:

Month	Demand
Jan	650
Feb	930
Mar	1110
Apr	1550
May	2120
Jun	3130
Jul	2870
Aug	1690
Sept	1530
Oct	1610
Nov	2110
Des	1330

Each worker can produce an average of 10 units per month and is paid $2,000 (payroll costs) at regular time per month. If workers go home early (undertime) they are paid the same as normal time (regular time). In accordance with the employment contract with the union, the company does not impose overtime hours and sub-contracts work. companies can recruit and train (hire & train) new workers for a fee of $2,000 and lay off per person for $ 500. Inventory cost $ 32 per unit at the end of each month. Currently the company employs 140 workers, to anticipate inventory is 0 then:

Make a production plan using the workforce level to anticipate inventory by choosing an additional supply (supply option) so as to minimize the remaining inventory at the end of the year. Layoffs, undertime, vacations, subcontracting, backorders, & stockouts are not used. In this production planning, adjustments are made to the work force only once before the first month starts.

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