Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN: 9780470458365
Author: Erwin Kreyszig
Publisher: Wiley, John & Sons, Incorporated
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A local firm is planning its workforce and production levels over the next year. The firm makes a variety of microprocessors and uses sales dollars as its aggregate production unit. Based on orders received and sales forecasts provided by the marketing department, the estimate of dollar

sales for the next year by month is as follows:

 

Month

Production Days

Predicted Demand
(in $10,000)

Month

Production Days

Predicted Demand
(in $10,000)

January

20

595

July

20

410

February

19

225

August

21

130

March

22

565

September

19

405

April

18

205

October

23

315

May

21

230

November

21

355

June

22

120

December

18

350

 

Inventory holding costs are based on a 25% annual interest charge. It is anticipated that there will be 675 workers on the payroll at the end of the current year and inventories will amount to $120,000. The firm would like to have at least $100,000 of inventory at the end of December next year. It is estimated that each worker accounts for an average of $60,000 of production per year (assume that one year consists of 250 working days). The cost of hiring a new worker is $200, and the cost of laying off a worker is $400.

 

  1. Assuming that shortages are not allowed, determine the minimum constant workforce that the company will need over the next year.
  2. Evaluate the total cost of the constant workforce plan found in part (a).
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