Answer:
Livingston Fabrication
1. Additional production assembly workers needed = 125
2. They should be hired July ending for August production.
3. 2,000,000 units will be in inventory at the end of October.
4. The average inventory level each month will be 1,200,000 units.
Step-by-step explanation:
a) Data and Calculations:
(in thousands) August September October November December
Beginning inventory 0 1,000 2,000 2,000 0
Production plan 2,000 2,000 2,000 2,000 2,000
Forecasting demand
(units of finished goods) 1,000 1,000 2,000 4,000 1,000
Ending inventory 1,000 2,000 2,000 0 1,000
Number of assembly workers employed = 500
Minutes per employee to assemble one unit of finished good = 3
Total hours that each assembly worker can provide per month = 160
Total time provided by each assembly worker in minutes = 9,600 (160*60)
Total units produced by each worker in a month = 3,200 (9,600/3) units
Total units produced by 500 workers = 1,600,000 (3,200 * 500)
Production planned units per month = 2,000,000
Units required to be produced by hiring extra workers = 400,000
Workers required to produce the extra 400,000 units = 125 (400,000/3,200)
Average inventory level each month = Total ending inventory/5
= 6,000/5
= 1,200