Question

Mole Mfg. has asked you to develop a chase plan for the production of its earth moving equipment. Below is the beginning inventory, monthly demand, and relevant work force information. Determine the total hire/fire costs and the number of workers employed at the end of October. Note: The ending inventory for October should be 0. July Beginning Inventory 1200: Demand is July 3300; Aug 3000; Sept 2550; Oct 2400. Hiring costs $50 per worker; firing costs $100 per worker; production rate 15 units per month per worker; starting workforce 200 workers

Answer 1

Mole Mfg.

Mole's total hire/fire costs and the number of workers employed at the end of October.

a) Hire/Fire Costs

i) Hire costs = 60 * $50 = $3,000

ii) Fire costs = 100 * $100 - $10,000

b) Number of workers employed at the end of October

= 160 workers

Step-by-step explanation:

a) Data and Calculations:

Inventory requirement:

Beginning Inventory 1200

Month Demand Units Production No. of Workers No. of Hire No. of Fire

Starting workforce 200

July 3300 -1,200 2,100 140 (2,100/15) 60

Aug 3000 3,000 200 (3,000/15) 60

Sept 2550 2,550 170 (2,550/15) 30

Oct 2400 2,400 160 (2,400/15) 10

Total 60 100