The Draper Tax Company provides tax services to local businesses. Draper chooses to meet all...
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Accounting
The Draper Tax Company provides tax services to local businesses. Draper chooses to meet all demand as it occurs because customers are unwilling to accept back orders. The company has provided the following cost, capacity, and demand information.
Calculate the size of the workforce needed for the company to meet average weekly demand.
Draper Tax Company Problem Data
Cost data
Regular-time labor cost per hour $25.00
Overtime labor cost per hour $37.50
Temporary worker cost per hour $40.00
Hiring cost per permanent worker $2000.00
Firing cost per permanent worker $1200.00
Backorder cost $500.00
Capacity data
Beginning workforce 12 employees
Labor standard per service 12 hours
Regular-time hours per period 40 hours
Overtime hours per period 8 hours
Demand data
Week 1 48 clients Week 4 40 clients
Week 2 36 clients Week 5 38 clients
Week 3 50 clients Week 6 48 clients
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