A Retailer Experiences a Seasonal Demand Pattern for Its Services

question 68

Essay

A retailer experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow.

Costs associated with operations are as follows:
Wages = $2,000 per worker per month
Hiring cost = $1,000 per worker
Layoff cost = $1,500 per worker
The current workforce level is 10 workers. Use the spreadsheet approach and the preceding data to answer the following questions:
a. What is the total cost of a staffing plan, including the cost of regular wages, hiring, and layoffs using a chase strategy with hiring and layoffs, but no overtime?
b. What is the total cost of the staffing plan, using a level strategy in which no overtime is allowed and the undertime paid for?
c. Suppose that overtime is allowed up to 25% of the regular-time capacity, and that overtime wages are 150% of the regular-time rate. What is the total cost of the level strategy with overtime and undertime that also minimizes undertime?

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Definitions:

Participation

The act of taking part in activities or contributing to group efforts.

Process

A series of actions or steps taken to achieve a particular end.

Norm

An understood rule for accepted and expected behavior in a society or group.

Inter-Team Dynamics

Inter-team dynamics occur as groups cooperate and compete with one another.