(solution) Certain company is planning its production and the workforce

(solution) Certain company is planning its production and the workforce

Certain company is planning its production and the workforce levels for the months from March until August. Forecasted demand for the periods are, 900, 440, 700, 1150, 1800, and 1100. At the end of February the company had 300 employees and an inventory of 140 units. Besides, the company wants to have at least 570 units by the end of August. Hiring an employee costs$340, while laying off an employee costs $690. The cost of holding a unit in inventory for a month is $40. It is know that producing a unit requires 55 hours of labor. Considering that each employee receives $2,200 per month and each month has 24 days and each day 8 hours.

  1. Find the optimal level of production and the number of employees required for every month.
  2. What is the effect on the plan if the holding cost doubles?