Question: (20 points) The Nell Corporation fabricates credit card blanks for various banks and store chains. The demand forecast for the year beginning six months from now is as given below. The seasonal peak in this growing business has been in the summer, when most new residents in an area establish new accounts. The factory currently employs 17 line workers on a single eight-hour shift. Line workers are paid $15 per hour, including all benefits. Overtime is paid at tiMeand a half. A maximum of one hour per day in overtime was deemed “sustainable” by management. For planning purposes, the production planning department assumes an output per worker of five boxes of finished cards per day, given normal lot sizes and changeovers. There were twenty work days in each month. Production could be augmented by new hires only. Unfortunately, there was only enough equipment on the first shift for four more workers. Because of the nature of the process, subcontracting and the use of temporary workers were impossible. A second shift could be established, although it would have to employ at least six workers to run the various pieces of equipment required. Pay would be $18 per hour for second shift work. New hires could be attracted to the company at an average cost per hire of $300 for advertising, training, etc. Layoffs cost the company an average of $2000 per workers for severance pay, counseling retraining, etc. Customers whose orders were not ready on time were understandably angry. Stockout costs were estimated to be $250 per box of cards, and shortages were not carried over to be filled in subsequent months. Inventory holding costs were $35 per box per month, including carrying cost, storage, handling, damage and obsolescence. In was expected that there would be 580 boxes in inventory at the start of Month 7. Develop a plan for Months 7-18. Aim for a total cost (sum of all labor costs, inventory carrying cost, layoff/hiring cost and stockout cost) that is less than $1,000,000. In your plan, please clearly specify:

a. First shift employment for each month

b. Second shift employment for each month

c. Overtime hours per worker per day

d. Costs