Homework # 7 The forecast for monthly demand is given b

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    Homework # 7
    The forecast for monthly demand is given below. On average there are 22 production days in a month. It takes one worker three days to complete one unit. The current production work force level is 50 employees. The cost of hiring an employee is $500 and the cost of firing an employee is $450. Regular time pay per employee is $1250 per month. The cost to hold an ending inventory for a month is $4 per unit. The current level of inventory is 800 units. As protection against unforeseeable demand fluctuations the ending inventory for each month is planned at no less than but as close as to 800 units. Develop separate production plans for chase and level strategies. What is the cost over 12 periods for each plan? Which plan is better?
    Planning Period
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    11
    12
    Monthly Demand
    372
    414
    395
    381
    418
    359
    386
    398
    409
    417
    421
    425
    Output
    Regular
    Inventory
    Beginning
    Ending
    Average
    Output
    Regular
    Inventory
    Beginning
    Ending
    Average
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