COMPLETE THIS QUESTION IN A MICROSOFT WORD DOCUMENT AND UPLOAD IN MOODLE
Demand for Sweet Tooth Limited follows a seasonal pattern – growing through the fall months and culminating in December, with small peaks in January (for after –season mark-downs, exchange and accessory purchases) and July (for Christmas-in-July specials).
Month Demand (cases) Month Demand (cases)
January 1000 July 500
February 400 August 500
March 400 September 1000
April 400 October 1500
May 400 November 2500
June 400 December 3000
Each worker can produce on average 100 cases of cakes each month.
Overtime is limited to 300 cases, and subcontracting is unlimited.
No cases of cakes are currently in inventory.
The wage rate is $10 per case for regular production, $15 for overtime production, and $25 for subcontracting.
No stock out are allowed. Holding cost is $1 per case per month.
Increasing the workforce costs approximately $1,000 per worker.
Decreasing the workforce costs $500 per worker.
Management would like to know the cost for the following scenarios:
a. The cost for the level production over the 12 month.
b. The cost to produce to meet demand each month.
c. The cost to increase or decrease the workforce in five-worker increments.