Develop a production schedule to produce the exact production requirements by varying the workforce size for the following problem. The monthly forecasts for Product X for January, February, and March are 940, 1,530, and 1,200, respectively. Safety stock policy recommends that half of the forecast for that month be defined as safety stock. There are 22 working days in January, 19 in February, and 21 in March. Beginning inventory is 450 units. Manufacturing cost is $240 per unit, storage cost is $6 per unit per month, standard pay rate is $6 per hour, overtime rate is $9 per hour, cost of stock-out is $8 per unit per month, marginal cost of subcontracting is $11 per unit, hiring and training cost is $170 per worker, layoff cost is $270 per worker, and worker productivity is 0.1 unit per hour. Assume that you start off with 41 workers and that they work 8 hours per day. (Leave the cells blank, whenever zero (0) is required. Input all values as positive values. Round your answers to the nearest whole number.)

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Answer:

This question is not incomplete from all indications. I expect that tables like below be provided so that one can populate the missing numbers as appropriate:

Forecast                                       940    1,530 1,200  

 Safety stock      

 Beginning inventory      

 Net production required      

 Workers required      

 Hired      

 Laid off      

 Actual production      

 Ending inventory      

                                             January                February        March

 Labor                                     $                             $          $    

 Inventory      

 Hiring      

 Layoff      

   

 Total                                       $                             $             $

Find the attached excel file for detailed answers

Explanation:

The below are the formulas used in solving the questions:

FORMULAS:    

Safety stock Forecast/2    

Opening inventory equals closing inventory of last month    

Net Production Desired equals forecast+safety stock-opening inventory    

Workers  required Net Production Desired/(8*number of days*0.1)    

Hires workers required -workers available    

layoff workers available -workers required    

actual production workers required*8*number of days*0.1    

Closing inventory actual production+safety stock-forecast    

   

labour cost workers required*8*6    

inventory (opening inventory+closing inventory )/2*6    

Hire             hires*170    

layoff          layoff*270    

Total cost labour cost+inventory+hire+layoff    

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