Question

The beginning workforce is 335 employees. The monthly output per employee is 400 units. The cost to hire and lay off a worker are ​$1,000 and ​$2,000​, respectively. The cost to carry an item in inventory for one month is estimated at ​$11​, and the stockout cost is ​$30 per unit. Show the production​ schedule, the inventory​ levels, and the changes in workforce from period to period. Compute the​ plan's cost.

Construct the chase sales and operations plan

​(enter your responses as whole numbers​).

Month	1	2	3	4	5	6	Total
Demand	32,000	49,600	36,800	25,600	20,800	23,200	188,000
Production	nothing

Answer 1

Cost of the plan excluding regular time production cost = inventory cost+stock out cost + hiring cost + firing cost
=0+0+1000*50+2000*327
=$704000

Formula