Layoff are allowed to respond to fluctuations in demand

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Reference no: EM13902520

A company has the following forecast demand for the net six months:

month 1= 300

month 2 = 300

month 3= 400

month 4= 500

month 5 = 300

month 6= 400

Suppose inventory, stockouts, overtime and subcontracting are not allowed. Only hiring and layoff are allowed to respond to fluctuations in demand. Currently there are 20 workers on the payroll. The following info is also available:

workdays/month= 20

labor hours/unit= 16

working time/day= 8

hiring cost/worker= $50

layoff cost/worker = $100

The total cost of hiring and layoff during the six month period will be?

a) $1000

b) $2000

c) $3000

d) $4000

e) $5000

Reference no: EM13902520

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