Question

BC Inc. custom makes furniture. It has 20 workers who produce 135 units per quarter each. The cost per unit is $2500.00. If a pure chase strategy is used, how many workers are fired or hired during quarter 2? Be as close as possible. Assume hiring or firing happens on first day of the quarter. The quarterly demand information is provided below. A. Q1: 3,000 units, B. Q2: 500 units, C. Q3: 4,500 units, D. Q4: 6,000 units

Answer 1

Step-by-step explanation:

Under chase strategy , production is changed according to demand .

In the first quarter quantity demanded = 3000 units .

no of worker required

= 3000 / 135

= 22 ( approx )

So in the first quarter person to be hired

= 22-20 = 2

In quarter 2

quantity demanded = 500 units .

no of worker required

= 500 / 135

= 4 ( approx )

So in the second quarter person to be fired

= 22- 4 = 18