A Retailer Experiences a Seasonal Demand Pattern for Its Services

Essay

A retailer experiences a seasonal demand pattern for its services. Labor requirements over a typical six- month period follow. $$\begin{array} { | l | l | l | l | c | c | c | } \hline \text { Period } & 1 & 2 & 3 & 4 & 5 & 6 \\\hline \text { Requirement } & 7 & 8 & 9 & 11 & 12 & 7 \\\hline\end{array}$$ 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 above data to answer the following questions:
a. 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
b. The total cost of the staffing plan, using a level strategy where no overtime is allowed, and the undertime paid for, is
c. Suppose that overtime is allowed up to 25 percent of the regular- time capacity, and that overtime wages are 150 percent of the regular- time rate. The total cost of the level strategy with overtime and undertime, which also minimizes undertime, is