Table 10.2
Archie Toys is a retailer operating out of Wichita, Kansas. It experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow. The workforce requirements (expressed as number of employees) are given in the following table for the next six periods.

Costs associated with operations are as follows:
Wages = $800 per worker per month
Hiring cost = $300 per worker
Layoff cost = $200 per worker
The current workforce level is nine workers, and the undertime is paid for. Use the spreadsheet approach and the preceding data to answer the following questions.

Use the information in Table 10.2. 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:

Question

Table 10.2
Archie Toys is a retailer operating out of Wichita, Kansas. It experiences a seasonal demand pattern for its services. Labor requirements over a typical six-month period follow. The workforce requirements (expressed as number of employees) are given in the following table for the next six periods.

Costs associated with operations are as follows:
Wages = $800 per worker per month
Hiring cost = $300 per worker
Layoff cost = $200 per worker
The current workforce level is nine workers, and the undertime is paid for. Use the spreadsheet approach and the preceding data to answer the following questions.

Use the information in Table 10.2. 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:

BlackTom AI · Accepted Answer

To approach this question, I will restate the problem and examine each answer option in turn before signaling any final judgment.
Option A: 'greater than $42,000 but less than or equal to $43,000.' This range asserts total staffing costs lie between 42k and 43k. Given the wage rate of $800 per worker per month, a nine-worker base, and monthly costs for hiring ($300) and layoff ($200) per worker, a chase plan typically incurs significant wage costs across six months plus any hiring/layoff penalties. Without doing the full spreadsheet calculation here, this option risks underestimating because even maintaining nine workers across multiple months incurs 9 × 800 × 6 = 43,200 in wages alone, not counting additional costs for changes in headcount and the possibility of undertime, which would push total well above 43k. Thus this option is unlikely.
Option B: 'greater than $43,000 but less than or equal to $44,000.' This range is more plausible than A, since base wages for six months at nine workers already totals about 43,200, and any hiring or layoff moves would add more cost. However, the precise chase strategy with hiring and layoffs typically introduces extra costs that would push the total beyond 44,000 in many realistic demand scenarios, especially if there are months requiring more workers or frequent adjustments. Therefore, this option is questionable.
Option C: 'less than or equal to $42,000.' Given the six-month wage component alone for nine workers is 9 workers × $800 × 6 months = $43,200, the total cannot be as low as $42,000 when wages alone exceed that amount. This makes C infeasible as a total staffing cost under the stated conditions, so this choice is incorrect.
Option D: 'greater than $44,000.' This option acknowledges that, beyond wages for the baseline workforce, the chase strategy with hiring and layoff costs typically adds to the total, especially with any required adjustments in workforce levels across the six months and the presence of undertime—factors that increase both direct and indirect costs. Since wages alone already exceed 43,200 and additional hiring/layoff costs will accumulate, exceeding 44,000 is a reasonable and safe conclusion in many practical scenarios. Therefore, this option is the most defensible given the information and typical cost structure.
In summary, while A, B, and C attempt to peg the total within tighter bands, the wage base for six months already surpasses 42,000 and is very close to 43,200, and the accompanying hiring and layoff costs tend to push totals above 44,000 in a chase staffing plan without overtime. Consequently, D is the option that correctly reflects the likely range for total staffing costs under these parameters.

MGS310001.2025FA Test 03: Chap 10,11

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Similar Questions

Question at position 3 In a Level Strategy, which of the following is/are true?inventory is accumulated during low demand months for use during high demand months.hiring and layoffs of workers is not allowed.the production level closely follows the demand pattern.a & b are true

A level strategy matches demand during the planning horizon by keeping the workforce level or the output rate constant.

The terms "aggregate plan" and "sales and operations plan" are synonymous.

Part 1The level strategy involves A. varying the workforce's regular-time capacity to equate supply to demand. B. continually adjusting workforce levels. C. keeping the workforce constant. D. hiring and laying off employees to match the demand forecast over the planning horizon.

Aggregate planning typically covers:

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MGS*3100*01.2025FA Test 03: Chap 10,11