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    Aggregate Production and Hires/Fires

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    Chapter 13, Problem 4

    Although the BackPack Company has always used a level aggregate plan, Jill is interested in evaluating chase aggregate plans also. She has calculated how many hires and fires would be necessary to adjust capacity to meet demand exactly each period.
    Use the following data to solve the problem.
    Problem Data
    Cost data
    Regular-time labor cost per hour $10.00
    Overtime labor cost per hour $15.00
    Subcontracting cost per unit (labor only) $84.00
    Holding cost per unit per period $10.00
    Back-order cost per unit per period $20.00
    Hiring cost per employee $600.00
    Firing cost per employee $450.00

    Capacity data
    Beginning workforce 210 employees
    Beginning inventory 400 units
    Labor standard per unit 6 hours
    Regular time available per period 160 hours
    Overtime available per period 32 hours
    Subcontracting maximum per period 1000 units
    Subcontracting minimum per period 500 units

    Demand data
    Period 1 6000 units
    Period 2 4800 units
    Period 3 7840 units
    Period 4 5200 units
    Period 5 6560 units
    Period 6 3600 units

    Period 1 2 3 4 5 6 Total
    Employees Needed 210 180 294 195 246 135 1260
    Now Jill wants to see how the plan would actually work. You need to:

    A. Show what would happen if this plan were implemented.
    Plan Period
    1 2 3 4 5 6 Total
    Demand 4800 7840 5200 6560 3600
    Employees
    Hires
    Fires

    B. Calculate the costs associated with this plan.
    Hiring Cost $

    Firing Cost $

    Regular-time labor Cost $

    Total Cost $

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    https://brainmass.com/business/business-management/aggregate-production-hires-fires-498140

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    The expert examines aggregate production and hires/fires.

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