Productivity is 0,5 unit/ hour = 1 unit/2 hours 2hr.

/ unit
Fall
Winter
Forecast
10.000 8.000
Beginning inventory (unit)
500
-2.300 (Beginning
inventory in winter
= ending inventory
in fall)
Production required (Forecast- Beginning 9.500
10.300
inventory)
Production hours required (Production
19.000 20.600
required x 2hr/unit)
Production hours available (30 workers x 14.400 14.400
60 days per season x 8 hours per day)
Overtime hours (production hours
6.200
required - production hours available)
Actual production (
7.200
10.300

Spring

Summer

7.000
0 (Beginning
inventory in winter
= ending inventory
in winter)
7.000

12.000
200(Beginning inventory in
winter = ending inventory in
spring)

14.000

23.600

14.400

14.400

9.200

7.200

11.800

11.800

Production hours available +Overtimehours

2 hr /unit
)
Ending inventory (Beginning inventory+
Actual production- Forecast)
Backorder (Forecast- Actual productionBeginning inventory)
Workers hired (

-2.300

200

2.300

23.60014.400
=19,17 20 workers
60 days x 8 hr

Production hours requiredProduction hours available

hours per 60 days per worker

(plan to hire temporary workers at

the beginning of summer)

)
Workers currently

30

30

30

Workers laid of

Backorder ($10/unit)
Hiring cost ($100/worker)
Firing cost ($200/worker)
Inventory ($5/unit-quarter)
Cost of labor for regular time
($5/hour)
Cost of labor for overtime
($8/hour)
Total

workers currently +workers

hired = 30 +20 = 50
20 (plan to hire temporary workers
at the beginning of summer lay the
workers off at the end of summer)

Fall
$23.000
$72.000

Winter
$72.000

Spring
$1.000
$72.000

Summer
$2.000
$4.000
$120.000

$49.600

$95.000

$121.600

$73.000

$126.000

Total

$415.60

Total staf
Working days per month
Working hours per day
Straight time rate
Overtime rate
Overtime
Carriying cost
Backorder cost

= 25 engineers
= 20 days
= 8 hours
= $30/hr
= $45
= 30% of straight time = 0,30
= $5 per hour per month
= $10 per hour per month

1. Working hours per month per worker

= working days x working hours
= 20 days x 8hr./day = 160 hours
2. The overtime hours available
= overtime x straight time hours available per month
= 0,30 x 4000 = 1.200 hours
Jan
Feb Mar Apr
Forecast work hours
5.00 4.00 6.00 6.00
0
0
0
0
Regular work hours available (hr./month) (total staf x working hours per
4.00 4.00 4.00 4.00
month per worker)
0
0
0
0
Overtime hours (hr./month) (Forecast work hours - Regular work hours
1.00 0
2.00 2.00
available)
0
0
0
Overtime hours available (hr./month) (overtime percentage x straight time
1.20 1.20 1.20 1.20
hours available per month)
0
0
0
0
Work hours required (Regular work hours available+ Overtime hours available) 5.20 5.20 5.20 5.20
0
0
0
0
Beginning inventory
0
200 1.40 600
0
Ending inventory (work hours required +beginning inventory-forecast work
200 1.40 600 0
hours)
0
Ending backorder
0
0
0
200

Straight
time
Overtime
Inventory
Backorder
Total

Jan
$120.000

Feb
$120.000

Mar
$120.000

Apr
$120.000

May
$120.000

$120.000

$54.000
$1.000
0
$175.000

$54.000
$7.000
0
$181.000

$54.000
$3.000
0
$177.000

$54.000
0
$2.000
$174.000

$54.000
$1.000
0
$175.000

0
$1.000
0
$121.000

May
5.00
0
4.00
0
1.00
0
1.20
0
5.20
0
0

Jun
4.000

200

200

Total
$1.003.0
00

4.000
0
0
4.000
200