Problem Data
Cost data
Regular-time labor cost per hour
$10
Overtime labor cost per hour
$15
Subcontracting cost per unit (Labor only)
$84
Holding cost per unit per period
$10
Backorder cost per unit per period
$20
Hiring cost per employee
$600
Firing cost per employee
$450
Capacity Data
Beginning workforce
210
Employees
beginning inventory
0
units
Labor standard per unit
6
hours
Regular-time available per period
160
hours
Overtime available per period
32
hours
Subcontracting maximum per period
1,000
units
Subcontracting minimum per period
500
units
Demand Data
Period 1
6,000
units
Period 2
4,800
units
Period 3
7,840
units
Period 4
5,200
units
Period 5
6,560
units
Period 6
3,600
units
a.) Calculate the aggregate production rate (per period).
b.) Calculate appropriate workforce given the aggregate production rate.
c.) Show the full plan with inventories, back orders, and production rate.
d.) Calculate the cost of the plan.
e.) How would you evaluate this plan in terms of customer service,
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