The Following Information Relates to a Company's Aggregate Production Planning

question 72

Multiple Choice

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 125 workers
Production per Employee = 500 units per quarter
Hiring Cost = $750 per worker
Firing Cost = $1,500 per worker
Inventory Carrying Cost = $10 per unit per quarter
If a chase demand strategy is used then the number of workers hired at the start of quarter 4 is

• A) 0
• B) 15
• C) 75
• D) 125

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Definitions:

Labor Efficiency Variance

The variance between the actual number of labor hours utilized and the anticipated standard labor hours for the achieved production volume.

Raw Materials Inventory

The stock of materials on hand that are used in the manufacturing process to produce goods.

Transaction (b)

Likely refers to a specific, numbered transaction within a set of financial records or accounting entries, without additional context provided.

Production

The process of creating goods and services through the combination of labor, materials, and technology.