Zero Inventory Plan

Month January February March April May June Total

Demand 2760 33220 3970 3540 3180 2900 19670

Additional Data:
Holding cost: $ 5.00 gear/month
Backlog cost: $ 15.00 gear/month
Hiring cost: $ 450.00 /worker
Lay-off cost: $ 600.00 /worker
Wages: $ 15.00 / hour
Working hours: 8 hours
Beg. Workers: 35 workers
currently no inventory
Average unit/worker 172

LEVEL PLAN
HIRE AND FIRE

Month January February March April May June Total Cost per Category
Forcasted demand 2760 3320 3970 3540 3180 2900 19670
Regular production 6897 6897 6897 6897 6897 6897 41382 $ 0.70
Overtime 0 0 0 0 0 0 0
Ending inventory 3577 7154 7154 10871 14588 18585 61929 $ 5.00
Workers 40 40 40 40 40 40
Hire 5 0 0 0 0 0 5 $ 450.00
fire 0 0 0 0 0 0 0 $ 600.00
Backlog 0 0 0 0 0 0 0 $ 15.00

CHASE PLAN
HIRE AND FIRE

Month January February March April May June Total Cost per Category
Forcasted demand 2760 3320 3970 3540 3180 2900 19670
Regular production 2760 3320 3970 3540 3180 2900 19670 $ 0.70
Overtime 0 0 0 0 0 0 0
Ending inventory 0 0 0 0 0 0 0 $ 5.00
Workers 16 19 23 21 18 17
Hire 0 3 4 0 0 0 7 $ 450.00
fire 19 0 0 2 3 1 25 $ 600.00
Backlog $ 15.00
 HYBRID OR MIXED PLAN
HIRE AND FIRE

Month January February March April May June Total Cost per Category
Forcasted demand 2760 3320 3970 3540 3180 2900 19670
Regular production 6020 6020 6020 6020 6020 6020 36120 $ 0.70
Overtime 0 0 0 0 0 0 0
Ending inventory 3260 5960 8010 10490 13330 16450 32900 $ 5.00
Workers 35 35 35 35 35 35
Hire 0 0 0 0 0 0 0 $ 450.00
fire 0 0 0 0 0 0 0 $ 600.00
Backlog 0 0 0 0 0 0 0 $ 15.00

RECOMMENDATION:
Judging at the result of the different plans, the chase plan got the lowest cost among the three. If in terms of
use chase plan but in a chase plan the employee - employer relationship is not that good because you need to fire employ
demand. It is good in the business perspective because of the cost but we should also consider the feelings of the employe
the business. I don't also recommend having the level plan even if it has a stable workforce because the cost is way too hig
plan to used is the combination of the two pure strategies, the hybrid or mixed method because it has a stable workforse

Since I choose the hybrid or mixed method, I will keep using my own personnel. I don’t need to hire new emp
enough to meet the demands.
Cost per Category Total cost per category

$ 0.70 $ 28,967.40

$ 5.00 $ 309,645.00

$ 450.00 $ 2,250.00
$ 600.00 $ -
$ 15.00
$ 340,862.40 Total level plan cost

Cost per Category Total cost per category

$ 0.70 $ 13,769.00

$ 5.00

$ 450.00 $ 3,150.00
$ 600.00 $ 15,000.00
$ 15.00
$ 31,919.00 Total chase plan cost
 Cost per Category Total cost per category

$ 0.70 $ 25,284.00

$ 5.00 $ 164,500.00

$ 450.00 $ -
$ 600.00 $ -
$ 15.00
$ 189,784.00 Total mixed plan cost

ng the three. If in terms of lowest cost, I will recommend to

e you need to fire employees every period to fit the
he feelings of the employee for they are the one handling
use the cost is way too high. So, I can say that the best
it has a stable workforse and a lower cost.

on’t need to hire new employees for they are already