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Find a level workforce plan that uses overtime

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Reference no: EM131399840

Streets in Bellevue are maintained by Public Works Division; "Street Maintenance". Public Works administrators are planning the workforce of this division for next year. Labor hour requirements for the next year are 8,000, 14,000, 29,000, and 18,000, for quarters 1 to 4 respectively. Each of the current 15 workers on the workforce can contribute 500 hours per quarter. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Subcontracting is not permitted. Payroll costs are $7,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of $21 for each overtime hour. Although unused overtime capacity has no cost, unused regular time is paid at $14 per hour.

The cost of hiring a worker is $3,500, and the cost of laying off a worker is $2,800.

a. Find a level workforce plan that uses overtime and the minimum amount of undertime (idle time for workers) possible. Overtime can be used to its limits (20%). What is the total cost of this plan?

b. Plan for a chase strategy to with variable workforce levels adjusted each quarter. What is the total cost of this plan?

c. Propose a mix strategy. Compare your plan to plans "a" and "b" and show the differences. Is your plan better than plan "a" or "b"? Why or why not?

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The task consists of a practical problem where the labor cost was calculated according to three different plans and the plan that generated the minimum cost was ascertained. the reason for the lowest cost for the plan was explained along with the shortcomings of the other two plans.

Reference no: EM131399840

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