Streets in Bellevue are maintained by Public Works Division; "Street Maintenance". Public Works administrators are planning the workforce of this division for next year. Labor hour requirements for the next year are 8,000, 14,000, 29,000, and 18,000, for quarters 1 to 4 respectively. Each of the current 15 workers on the workforce can contribute 500 hours per quarter. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Subcontracting is not permitted. Payroll costs are $7,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of $21 for each overtime hour. Although unused overtime capacity has no cost, unused regular time is paid at $14 per hour.
The cost of hiring a worker is $3,500, and the cost of laying off a worker is $2,800.
a. Find a level workforce plan that uses overtime and the minimum amount of undertime (idle time for workers) possible. Overtime can be used to its limits (20%). What is the total cost of this plan?
b. Plan for a chase strategy to with variable workforce levels adjusted each quarter. What is the total cost of this plan?
c. Propose a mix strategy. Compare your plan to plans "a" and "b" and show the differences. Is your plan better than plan "a" or "b"? Why or why not?