BUSI 2301 Lecture Notes - Lecture 1: Layoff, Unita
Document Summary
Start with 275 workers and keep them throughout. This results in zero backorder & ending inventory in month 7. Not worth hiring then laying off a worker after 1 month ( extra) vs carrying inventory for one month (. Therefore, 275 workers in the first 4 months is optimum. To avoid the backorders in month 5, it is cheaper to use overtime rather than hire then fire a worker after one mo. Also, to avoid postive ending inventory at the end of month 7, 5 workers need to be laid off in month 7. b. Producing 40 units by 5 workers each month results in a total of 79 units backordered. Hiring an additional worker is cheaper than overtime if kept for >= 4 months (-)>(+)/4. Bec. shortage 79 > 8(7), we should keep the additional worker for the whole 7 months. If we hire another worker just for 3 months during shortage, may-july (to produce 24units),
