Mole Mfg. has asked you to develop a chase plan for the production of its earth moving equipment. Below is the beginning inventory, monthly demand, and relevant work force information. Determine the total hire/fire costs and the number of workers employed at the end of October. Note: The ending inventory for October should be 0. July Beginning Inventory 1200: Demand is July 3300; Aug 3000; Sept 2550; Oct 2400. Hiring costs $50 per worker; firing costs $100 per worker; production rate 15 units per month per worker; starting workforce 200 workers

Mole Mfg.

Mole's total hire/fire costs and the number of workers employed at the end of October.

a) Hire/Fire Costs

i) Hire costs = 60 * $50 = $3,000

ii) Fire costs = 100 * $100 - $10,000

b) Number of workers employed at the end of October

= 160 workers

Explanation:

a) Data and Calculations:

Inventory requirement:

Beginning Inventory 1200

Month Demand Units    Production  No. of Workers  No. of Hire No. of Fire

Starting workforce                                  200                  

July       3300     -1,200    2,100          140 (2,100/15)                           60

Aug      3000                   3,000         200 (3,000/15)        60

Sept     2550                   2,550         170 (2,550/15)                          30

Oct      2400                    2,400         160 (2,400/15)                          10

Total                                                                                    60           100

the correct answer is:

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reducing the scale of the market for a new product.