Question

JokersRWild makes playing cards in several different styles, but a “standard” deck of cards is used for planning purposes. The average worker at JokersRWild can make 10,000 sets of decks of cards per month at a cost of $1.70 per deck during regular production and $2.00 during overtime. The company currently employs 19 workers. Experience shows that it costs $850 to hire a worker and $850 to fire a worker. Inventory carrying cost is $.32 per deck per month. The beginning inventory is 42,000, and at least that amount is desired each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month. Month January February March April May June Demand 130,000 180,000 170,000 360,000 370,000 350,000

Answer 1

Production Planning:

	January	February	March	April	May	June
Forecast	130000	180000	170000	360000	370000	350000
Beginning inventory	42000	42000	42000	42000	42000	42000
Production required	130000	180000	170000	360000	370000	350000
Regular workforce	13	18	17	36	37	35
Regular production per worker per month	10000	10000	10000	10000	10000	10000
Regular production	130000	180000	170000	360000	370000	350000
Overtime production	0	0	0	0	0	0
Total production	130000	180000	170000	360000	370000	350000
Ending inventory	42000	42000	42000	42000	42000	42000
Ending backorders	0	0	0	0	0	0
Workers hired	0	5	0	19	1	0
Workers laid off	6	0	1	0	0	2
	January	February	March	April	May	June
Regular production cost ($1.70 per unit)	$221,000	$306,000	$289,000	$612,000	$629,000	$595,000
Overtime	$0	$0	$0	$0	$0	$0
Inventory ($0.32 per deck per month)	$13,440	$13,440	$13,440	$13,440	$13,440	$13,440
Backorder	$0	$0	$0	$0	$0	$0
Hiring ($850 per worker)	$0	$4,250	$0	$16,150	$850	$0
Layoff ($850 per worker)	$5,100	$0	$850	$0	$0	$1,700
Total	$239,540	$323,690	$303,290	$641,590	$643,290	$610,140
Total cost						$2,761,540