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A company has the following forecast demand for the next five months: 1,600, 2,400, 3,200, 2,800, and 2,400. The following information is also available.
current work force = 15
workdays/month = 20
labor hours/unit = 2
working time/day = 8
hiring cost/worker = $100
layoff cost/worker = $50
Inventory, stockouts, overtime, and subcontracting are not allowed. Only hiring and layoff are allowed to respond to fluctuations in demand. Determine the total cost of hiring and layoff during the five-month period.
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