SECOND PART OF CASE [ CASE WRITE UP]

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h.b.b-case__3.xlsx
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Data

Costs
Item Cost
Materials cost/unit $ 20
Inventory holding cost/unit/month 3.0
Marginal cost of stockout/unit/month
Hiring and training cost/worker
Layoff cost/worker
Labor hours required/unit 0.1667
Regular time cost/hour 20.0
Over time cost/hour 30.0
Marginal subcontracting cost/unit
Initial Workforce size 1250
Maximum overtime per worker per month 20
Starting inventory ('000s) 50
Ending inventory ('000s) 50

Production Plan

Period Hired Laid off Workforce Overtime Inventory Stockout Subcontract Production Demand Inventory Overtime Production OT Production
0 0 0 1,250 0 50 0 0
1 0 0 1,250 0.0 50.0 0 0 1000 0 1,000 25000 200000 0
2 0 0 1,250 0.0 150.0 0 0 1200 0 1,100 25000 0 0
3 0 0 1,250 25000.0 500.0 0 0 1350 0 1,000 0 0 150
4 0 0 1,250 25000.0 650.0 0 0 1350 0 1,200 0 0 150
5 0 0 1,250 25000.0 500.0 0 0 1350 0 1,500 0 0 150
6 0 0 1,250 25000.0 250.0 0 0 1350 0 1,600 0 0 150
7 0 0 1,250 25000.0 0.0 0 0 1350 0 1,600 0 0 150
8 0 0 1,250 0.0 0.0 0 0 900 0 900 25000 300000 0
9 0 0 1,250 0.0 50.0 0 0 1150 0 1,100 25000 50000 0
10 0 0 1,250 0.0 450.0 0 0 1200 0 800 25000 0 0
11 0 0 1,250 25000.0 400.0 0 0 1350 0 1,400 0 0 150
12 0 0 1,250 25000.0 50.0 0 0 1350 0 1,700 0 0 150
Costs
Period Hiring Lay off Regular time Overtime Inventory Stockout Subcontract Material
1 0 0 4,000,000 0 150,000 0 0 20,000,000
2 0 0 4,000,000 0 450,000 0 0 24,000,000
3 0 0 4,000,000 750,000 1,500,000 0 0 27,000,000
4 0 0 4,000,000 750,000 1,950,000 0 0 27,000,000
5 0 0 4,000,000 750,000 1,500,000 0 0 27,000,000
6 0 0 4,000,000 750,000 750,000 0 0 27,000,000
7 0 0 4,000,000 750,000 0 0 0 27,000,000
8 0 0 4,000,000 0 0 0 0 18,000,000
9 0 0 4,000,000 0 150,000 0 0 23,000,000
10 0 0 4,000,000 0 1,350,000 0 0 24,000,000
11 0 0 4,000,000 750,000 1,200,000 0 0 27,000,000
12 0 0 4,000,000 750,000 150,000 0 0 27,000,000
298,000,000
total cost 360,400,000