Develop a Chase Strategy and a Level Strategy based on the following information. • The Level...

Develop a Chase Strategy and a Level Strategy based on the following information.

• The Level Strategy requires the use of a constant workforce equal to the minimum requirement based on the expected demand (Note: Any needed capacity can be fulfilled with overtime.)

• Chase strategy should use ‘hiring and firing’ actions to balance the capacity.

Twenty-three workers worked during February. Illustrate and explain which is the best plan.

	March	April	May	June
Beginning Inventory	600	300	250	200
Demand Forecast	1800	1200	1200	1800
Numbers of Working days by month	21	200	21	22

Costs
Materials	$90.00 per unit
Inventory holding cost	$8.50 per unit per month
Marginal cost of stockout	$25.00 per unit per month
Marginal cost of subcontracting	$60.00
Hiring and training cost	$4500.00 per worker
Layoff cost	$6000.00 per worker
Labor hours required per unit	3.0 per unit
Straight-line cost (first eight hours each day)	$12.00 per hour
Overtime cost	$24.00 per hour

Solutions

Expert Solution

ekkarill92 answered 8 months ago

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