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Forrester and Cohen is a small accounting firm, managerd by Joseph Cohen since the retirement in December of his parnter Brad Forrester. Cohen and his 3 CPA's can together bill 640 hours per month. When Cohen or another accountant bills more than 160 hours per month, he or she gets an additional "overtime" pay of $62.50 for each of the extra hours: This is above and beyond the $5,000 salary each draws during the month. (Cohen draws the same base pay as his employees) Cohen strongly discourages any CPA from working (billing) more than 240 hours in any given month. The demand for billable hours for the firm over the next 6 months is estimated below:
Jan 600 hoursFeb 500 hoursMar 1,000 hoursApr 1,200 hoursMay 650 hoursJune 590 hours
Cohen has an agreement with Forrester, his former partner to help out during the busy tax season, if needed, for an hourly fee of $125. Cohen will not even consider laying off one of his colleagues in the case of a slow economy. He could however, hire another CPA at the same salary, as business dictates.
a.) Develop an aggregate plan for the 6 month period.b.) Compute the cost of Cohen's plan of using overtime and Forrester.c.) Should the firm remain as is, with a total of 4 CPA's?
This case discusses McDonald's Corporation and the situation it faced in 2001. After many years of double?digit growth in sales and net revenue, the company's sales grew only 1.12 percent and net revenue dropped 17.2 percent from 2000 to 2001.
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Would you expect a stronger anti-union response from an employer in manufacturing or an employer in a service industry?
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The importance of Supply Chain Management can not be underestimated because it ensures that the right materials are at the right place at the right time at a minimal cost and maximum quantity.
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