The Barberton Municipal Division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Cosmo Kramer, road maintenance director, must submit astang plan for the next year based on a set schedule for repairs and on the city budget. Kramer estimates that the labor hours required for the next four quarters are 6,000, 12,000, 19,000, and9,000, respectively. Each of the 11 workers on the workforce can contribute 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an over time pay rate of $18 for each overtime hour. Overtime is limited to 20 percent of the regular-time capacity in 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 $3,000, and the cost of laying o a worker is$2,000. Subcontracting is not permitted.
a. Prepare a level workforce plan that relies just on overtime and the minimum amount of under time possible. Overtime can be used to its limits in any quarter.
b. What is the total cost of the level plan and how many under time hours does it call for?
c. Prepare a chase strategy that varies the workforce level without using overtime or under time.
d. What is the total cost of the chase plan? Contrast the level and chase plans on the basis of annual costs