Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 90 workers on January 31. You are given the following demand forecast: February, 80,640; March, 60,480; April, 100,160; May, 40,160. Productivity is four units per worker hour, eight hours per day, 21 days per month. Assume zero inventory on February 1. Costs are hiring, $52 per new worker; layoff, $72 per worker laid off; inventory holding, $8 per unit-month; straight-time labor, $8 per hour; overtime, $12 per hour; backorder, $16 per unit.
Develop a production plan and calculate the total cost of this plan. Note: Assume any layoffs occur at beginning of next month. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to the nearest whole number.)
February March April May
Forecast 80,640 60,480 100,160 40,160
Beginning inventory
Production required
Production hours required
Regular workforce
Regular production
Overtime hours
Overtime production
Total production
Ending inventory
Ending backorders
Workers hired
Workers laid off
February March April May
Straight time
Overtime
Inventory
Backorder
Hiring
Layoff
Total
Total cost
