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 $2.30 per deck during regular production and $2.60 during overtime. The company currently employs 24 workers. Experience shows that it costs $1,150 to hire a worker and $1,150 to fire a worker. Inventory carrying cost is $.38 per deck per month. The beginning inventory is 32,000, and at least that amount is desired each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month.
Month Demand
January 200,000
February 130,000
March 200,000
April 420,000
May 430,000
June 540,000
a) Determine the cost of the level production plan.
b) Develop a six-month production plan based on chase by using overtime (no workers will be fired and inventory increases if necessary. Determine the cost of the chase production plan.
c) Develop a six-month production plan based on chase by changing workforce level. Determine the cost of the chase production plan by changing workforce level.