operation management

| December 3, 2015

Dave’s Stove-Top Popcorn currently has three full-time employees who are each paid $1500 per month. An employee can only work a maximum of 100 hours per month because production normally takes place at night. They do receive $1500 even if they do not work 100 hours, however. Part-time employees can be hired at a cost of $25 per hour. Dave’s Stove-Top Popcorn has forecasted that demand for the next six months will be as follows:

Month: 1 2 3 4 5 6

Hours: 380 280 450 420 520 390

a.)What is the total cost if Dave relies on part-time employees to meet additional demand?

b.)What is the total cost if Dave hires one more full-time employees to meet additional demand?

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