A company has the following forecast demand for the net six months:
month 1= 300
month 2 = 300
month 3= 400
month 4= 500
month 5 = 300
month 6= 400
Suppose inventory, stockouts, overtime and subcontracting are not allowed. Only hiring and layoff are allowed to respond to fluctuations in demand. Currently there are 20 workers on the payroll. The following info is also available:
workdays/month= 20
labor hours/unit= 16
working time/day= 8
hiring cost/worker= $50
layoff cost/worker = $100
The total cost of hiring and layoff during the six month period will be?
a) $1000
b) $2000
c) $3000
d) $4000
e) $5000