Advanced Operations ManagementAssignment – I

Submission Deadline : 12 noon Monday 27th Jul. 2015

IMPORTANT NOTE : Detailed STEP WISE SOLUTIONS ( generated independently ) WILL ONLY BE given MARKS/EVALUATED.

The work load for the LOCAL JOB SHOP is subject to considerable seasonal fluctuation. However, machine operators are difficult to hire and costly to train, so the manager is reluctant to lay off workers during the slack seasons. He is likewise reluctant to maintain his peak season payroll when it is not required. Furthermore, he is definitely opposed to overtime work on a regular basis. Since all work is done to custom orders, it is not possible to build inventories during slack seasons. Therefore the manager is in a dilemma as to what his policy should be regarding employment levels.

The following estimates are given for the manpower requirements during the four seasons of the year for the foreseeable future :

Season Spring Summer Autumn Winter Spring ……..

Requirements 255 220 240 200 255 ………

Employment will not be permitted to fall below these levels. Any employment above these levels is wasted at an approximate cost of $2,000 per man per season. It is also estimated that the hiring and firing costs are such that the total cost of changing the level of employment from one season to the next is $200 times the square of the difference in employment levels. Fractional levels of employment are possible because of a few part-time employees, and the above data also apply on a fractional basis.

The manager needs to determine what the employment level(s) should be to minimize total cost.