A company has the following forecast demand for the next 6 months:
month 1: demand =300
month 2: demand= 300
month 3 demand = 400
month 4: demand = 500
month 5: demand =300
month 6: demand = 400
Suppose inventory, stock outs, overtime and subcontract in aren't allowed. Only hiring and layoffs are allowed to respond to fluctuations. There are currently 20 workers on payroll. This 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 6 month period will be?
a) $1000
b) $2000
c) $3000
d) $ 4000
e) $5000