Problem 1. Arsenal Electronics is going to construct a new $1.2 billion semiconductor plant and has selected four towns in the Midwest as potential sites. The important location factors and ratings for each town are as follows: Scores (0 to 100) Location Factor Weight Abbeton Bayside Cane Creek Dunnville Work ethics 0.18 80 90 70 75 Quality of life 0.16 75 85 95 90 Labor laws/unionization 0.12 90 60 60 70 Infrastructure 0.10 60 50 60 70 Education 0.08 80 90 85 95 Labor skill and education 0.07 75 65 70 80 Cost of living 0.06 70 80 85 75 Taxes 0.05 65 70 55 60 Incentive package 0.05 90 95 70 80 Government regulations 0.03 40 50 65 55 Environmental regulations 0.03 65 60 70 80 Transportation 0.03 90 80 95 80 Space for expansion 0.02 90 95 90 90 Urban proximity 0.02 60 90 70 80 Recommend a site based on these location factors and ratings. Answer 1: Problem 2. Sawyer Furniture is one of the few remaining domestic manufacturers of wood furniture. In the current competitive environment, cost containment is the key to its continued survival. Demand for furniture follows a seasonal demand pattern with increased sales in the summer and fall months, culminating with peak demand in November. The cost of production is $16 per unit for regular production, $24 for overtime, and $33 for subcontracting. Hiring and firing costs are $500 per worker. Inventory holding costs are $20 per unit per month. There is no beginning inventory. Ten workers are currently employed. Each worker can produce 50 pieces of furniture per month. Overtime cannot exceed regular production. Given the following demand data, use Excel Solver to design an aggregate production plan for Sawyer Furniture that will meet demand at the lowest possible cost. Input: Beg. Wkrs 10 Regular $16 Hiring $500 Units/wkr 50 Overtime $24 Firing $500 Beg. Inv. 0 Subk $33 Inventory $20 Month Demand Reg OT Subk Inv #Wkrs #Hired #Fired Jan 500 500 0 0 0 10 0 0 Feb 500 500 0 0 0 10 0 0 Mar 1000 1,000 0 0 0 20 10 0 Apr 1200 1,000 200 0 0 20 0 0 May 2000 1,000 1,000 0 0 20 0 0 Jun 400 400 0 0 0 8 0 12 Jul 400 400 0 0 0 8 0 0 Aug 1000 1,000 0 0 0 20 12 0 Sep 1000 1,000 0 0 0 20 0 0 Oct 1500 1,500 0 0 0 30 10 0 Nov 7000 3,500 3,500 0 0 70 40 0 Dec 500 500 0 0 0 10 0 60 Total 17,000 12,300 4,700 0 0 246 72 72 Answer 2: Problem 3. A retailer experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow. Period 1 2 3 4 5 6 Requirement 12 10 12 8 9 8 Costs associated with operations are as follows: Wages = $1,500 per worker per month Hiring cost = $1,500 per worker Layoff cost = $1,500 per worker The current workforce level is 11 workers. Use the spreadsheet approach and the preceding data to answer the following questions. a. What is 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? b. What is the total cost of the staffing p.

1. Problem 1.
Arsenal Electronics is going to construct a new $1.2 billion
semiconductor plant and has selected four towns in the Midwest
as potential sites. The important location factors and ratings for
each town are as follows:
Scores (0 to 100)
Location Factor
Weight
Abbeton
Bayside
Cane Creek
Dunnville
Work ethics
0.18
80
90
70
75
Quality of life
0.16
75
85
95
90
Labor laws/unionization
0.12
90
60
60
70
Infrastructure
0.10
60

2. 50
60
70
Education
0.08
80
90
85
95
Labor skill and education
0.07
75
65
70
80
Cost of living
0.06
70
80
85
75
Taxes
0.05
65
70
55
60
Incentive package
0.05
90
95
70
80
Government regulations
0.03
40

3. 50
65
55
Environmental regulations
0.03
65
60
70
80
Transportation
0.03
90
80
95
80
Space for expansion
0.02
90
95
90
90
Urban proximity
0.02
60
90
70
80
Recommend a site based on these location factors and ratings.
Answer 1:
Problem 2.
Sawyer Furniture is one of the few remaining domestic

4. manufacturers of wood furniture. In the current competitive
environment, cost containment is the key to its continued
survival. Demand for furniture follows a seasonal demand
pattern with increased sales in the summer and fall months,
culminating with peak demand in November.
The cost of production is $16 per unit for regular production,
$24 for overtime, and $33 for subcontracting. Hiring and firing
costs are $500 per worker. Inventory holding costs are $20 per
unit per month. There is no beginning inventory. Ten workers
are currently employed. Each worker can produce 50 pieces of
furniture per month. Overtime cannot exceed regular
production. Given the following demand data, use Excel Solver
to design an aggregate production plan for Sawyer Furniture
that will meet demand at the lowest possible cost.
Input:
Beg. Wkrs
10
Regular
$16
Hiring
$500
Units/wkr
50
Overtime
$24
Firing
$500
Beg. Inv.
0
Subk
$33
Inventory
$20
Month

5. Demand
Reg
OT
Subk
Inv
#Wkrs
#Hired
#Fired
Jan
500
500
0
0
0
10
0
0
Feb
500
500
0
0
0
10
0
0
Mar
1000
1,000
0
0
0
20
10
0
Apr

6. 1200
1,000
200
0
0
20
0
0
May
2000
1,000
1,000
0
0
20
0
0
Jun
400
400
0
0
0
8
0
12
Jul
400
400
0
0
0
8
0
0
Aug

7. 1000
1,000
0
0
0
20
12
0
Sep
1000
1,000
0
0
0
20
0
0
Oct
1500
1,500
0
0
0
30
10
0
Nov
7000
3,500
3,500
0
0
70
40
0
Dec

8. 500
500
0
0
0
10
0
60
Total
17,000
12,300
4,700
0
0
246
72
72
Answer 2:
Problem 3.
A retailer experiences a seasonal demand pattern for its
services. Labor requirements over a typical six-month period
follow.
Period
1
2
3
4

9. 5
6
Requirement
12
10
12
8
9
8
Costs associated with operations are as follows:
Wages = $1,500 per worker per month
Hiring cost = $1,500 per worker
Layoff cost = $1,500 per worker
The current workforce level is 11 workers. Use the
spreadsheet approach and the preceding data to answer the
following questions.
a. What is 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?
b. What is the total cost of the staffing plan, including the cost
of regular wages, hiring, and layoffs using a level strategy with
hiring and layoffs, with overtime of up to 25% of the regular-
time capacity, and that overtime wages are 150% of the regular-
time rate.
a) CHASE Strategy
1
2
3
4
5
6

10. Total
INPUTS
Forecasted demand
12
10
12
8
9
8
59
Workforce level
Undertime
Overtime

11. Utilized time
Hires
Layoffs

12. CALCULATED
Utilized time cost
Undertime cost
Overtime cost
Hiring cost

13. Layoff cost
Total Cost
b) LEVEL Strategy

14. 1
2
3
4
5
6
Total
INPUTS
Forecasted demand
12
10
12
8
9
8
59
Workforce level
Undertime

15. Overtime
Utilized time
Hires

16. Layoffs
CALCULATED
Utilized time cost
Undertime cost
Overtime cost

17. Hiring cost
Layoff cost
Total Cost

18. **Don’t forget to figure out the required number of employees
for the Level Strategy
Answer 3:
Problem 4.
The Union Manufacturing Company is producing two types of
products: A and B. The demand forecast, batch size, and time
standards for the Mark I operation follow:
Product A
Product B
Demand forecast (units/yr.)
1,000
4,000
Batch size (units/batch)
20
10
Process time (hr./unit)
3.2
4.5

19. Setup time (hr./batch)
10
20
The company works 250 days per year and operates 2 shifts,
each covering 8 hours. If a 20 percent capacity cushion is
maintained, how many Mark I machines are required if Union
does not resort to any short-term capacity options?
Answer 4:
Problem 5.
A firm of four departments has the following trip matrix and
current block plan of all departments:
Trips Between Departments
Dept. Name
A

20. B
C
D
A
….
14
6
9
B
….
7
16
C
….
2
D
….
A
B
D
C
a. What is the weighted-distance score for the current layout?
(Assume rectilinear distance and that the distance between
departments A and B is one unit of distance.)
b. What would be the weighted-distance score for the following

21. layout?
A
C
D
B
Answer 5: