Question

A software company is creating a scheduling plan for a nine-month project,. The company has 30 of its own full-time employees and can assign them to the project. For any shortage of personnel, the company will hire short-term contract employees. Company employees earn $5,500 per month, while short-term contract employees make $8,000/month. Contract employees can be assigned to the project beginning in any month, and their contract period is two months. The number of workers required for the project by month is shown below:

Month	1	2	3	4	5	6	7	8	9
Required	17	35	62	65	75	78	61	42	28

a) Determine the optimal staffing plan for the project. (25 pts)

b) The project manager is evaluating options to complete the project early so that the company can earn a bonus. He has determined that the project schedule can be compressed into a seven-month schedule, with the same total number of worker-months. In that case, the staffing requirements are as shown below.

	1	2	3	4	5
Required	38	52	135	115	100

Develop an optimal staffing plan for the project under the accelerated schedule. (10 pts)

c) Suppose the bonus for completing the project two months early is $225,000. What would be the net bonus to the company, after adjusting for any difference in personnel costs under the accelerated schedule? (5 pts)

I am not very familiar with staff optimization. So please elaborate as much as possible. A step by step from excel would be greatly appreciated.

Answer 1

No. of ful time employees - 30. All employees over and above 30 are contract employees.

Assumption - Number of employees mentioned in the table are absolute and not incremental employees. No limitation on hiring contractual employees.

a) For month 1, 17 employees are required which can be fulfilled completely by full-time employees. So, 17*5500= $93,500 for 1st month.

For month 2, 35 employees are required, 30 will be full-time employees and 5 will be contract employees. So, (30*5500) + (5*8000) = 165000 + 40000 = $2,05,000 for 2nd month.

For months 3 to 8, 30 employees will be full time employees and balance will be contract employees.

For month 9, all 28 employees required will be fulfilled by company's full-time employees.

Months	1	2	3	4	5	6	7	8	9
Number of employees	17	35	62	65	75	78	61	42	28	Total
Full-time employees cost	93500	165000	165000	165000	165000	165000	165000	165000	165000	1402500
Contract employees cost	0	40000	256000	280000	360000	384000	248000	96000	0	1664000
Total	93500	205000	421000	445000	525000	549000	413000	261000	154000	3066500

Total employee cost is $ 30,66,500/-.