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The Barberton Division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Cindy Kramer, road maintenance director, must submit a staffing plan for next year based on the set schedule for repairs and on the city budget. Kramer estimates that the labor hours required for the next four quarters are 6000, 12000, 19000, and 9000 respectively. Each of the 11 workers on the workforce can contribute 500 hours per quarter. Payroll costs are $6000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of $18 per each overtime hour. Overtime is limited to 20% of the regular time capacity is any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $12 per hour. The cost of hiring a worker is $3000, and the cost of laying off a worker is $2000. Subcontracting is not permitted.
a) Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime can be used to its limits in any quarter. What is the total cost of the plan and how many undertime hours does it call for?
b) Use a chase strategy that varies the workforce level without using overtime or undertime. What is the total cost of this plan?
c) Propose a plan of your own. Compare your plan with those in part (a) and (b) and discuss your comparative merits.
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