Table 10.2 Archie Toys Is a Retailer Operating Out of Wichita, Kansas

question 33

Multiple Choice

Table 10.2
Archie Toys is a retailer operating out of Wichita, Kansas. It experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow. The workforce requirements (expressed as number of employees) are given in the following table for the next six periods.

Costs associated with operations are as follows:
Wages = $800 per worker per month
Hiring cost = $300 per worker
Layoff cost = $200 per worker
The current workforce level is nine workers, and the undertime is paid for. Use the spreadsheet approach and the preceding data to answer the following questions.
-Use the information in Table 10.2. The total cost of the staffing plan, including the cost of regular wages, hiring, and layoffs using a chase strategy with hiring and layoffs but no overtime, is:

• A) less than or equal to $42,000.
• B) greater than $42,000 but less than or equal to $43,000.
• C) greater than $43,000 but less than or equal to $44,000.
• D) greater than $44,000.

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Definitions:

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs, highlighting the trade-offs in production choices.

Fully Employed

A situation in which all available labor resources are being used in the most economically efficient way.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods, given a set of inputs and technology, assuming efficient use of resources.