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Mike’s Exhaust Works produces efficient exhaust systems used on custom motorcycles. They sell their systems to other manufacturers, who build customized bikes to clients. Kari is the sales manager, and she has created the following projected demand schedule for Tom, the production manager.Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecProjected Demand 15000 19000 20500 21000 22000 21000 21000 19500 18000 16200 15000 15000Mike’s Exhaust Currently has 50 tradesmen who each work 20 days a week, and can each produce 15 exhaust systems per day. a) Assuming that the company is only concerned with aggregate yearly demand, should the labor force be changed? Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecProjected Demand 15000 19000 20500 21000 22000 21000 21000 19500 18000 16200 15000 15000Workers ? ? ? ? ? ? ? ? ? ? ? ?Work days 20 20 20 20 20 20 20 20 20 20 20 20Units/Worker day 15 15 15 15 15 15 15 15 15 15 15 15#VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!b) Assuming that the company is concerned with aggregate monthly demand, how should the labor force be changed? (round to the nearest whole employee – exact monthly demand must me met, no over or underproduction allowed).0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecProjected Demand 15000 19000 20500 21000 22000 21000 21000 19500 18000 16200 15000 15000Workers ? ? ? ? ? ? ? ? ? ? ? ?Work days 20 20 20 20 20 20 20 20 20 20 20 20Units/Worker day 15 15 15 15 15 15 15 15 15 15 15 15#VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!c) Each time the company lays off an employee, the expenses for the layoff are $19,000. In this year, how much are the costs of layoffs? Workers ? ? ? ? ? ? ? ? ? ? ? ?Negative Change? ? ? ? ? ? ? ? ? ? ? ? ?Cost $ 19,000 $ 19,000 $ 19,000 $ 19,000 $ 19,000 $ 19,000 $ 19,000 $ 19,000 $ 19,000 $ 19,000 $ 19,000 $ 19,000Total Cost #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!d) During busy times, the tradesmen at Mike’s will happily take up to 50% overtime each month. Each worker makes $140 a day and overtime is 50% above standard rate. Using a fixed staff of 50, use overtime to calculate the number of equivalent workers needed per day to fill demand. (Hint: like “b” but do not round)Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecProjected Demand 15000 19000 20500 21000 22000 21000 21000 19500 18000 16200 15000 15000Workers ? ? ? ? ? ? ? ? ? ? ? ?Work days 20 20 20 20 20 20 20 20 20 20 20 20Units/Worker day 15 15 15 15 15 15 15 15 15 15 15 15#VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!e) What is the overtime wage cost in the above example (d)? Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecEquivalent Workers ? ? ? ? ? ? ? ? ? ? ? ?Actual Workers 50 50 50 50 50 50 50 50 50 50 50 50Variation #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!Workdays/month 20 20 20 20 20 20 20 20 20 20 20 20Overtime Cost/day ? ? ? ? ? ? ? ? ? ? ? ?Total Overtime cost #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!f) CCompare this overtime wage cost to the layoff cost in (c). Which is better?g) The tradesmen at Mike’s are in a union, and would like to eliminate the cycle of temporary hires and layoffs. They are will to negotiate their overtime wage so that it does not benefit the company to continue with this process. The current overtime wage is time + 50%. What should the union negotiate to change it to?Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecEquivalent Workers ? ? ? ? ? ? ? ? ? ? ? ?Actual Workers 50 50 50 50 50 50 50 50 50 50 50 50Variation #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!Workdays/month 20 20 20 20 20 20 20 20 20 20 20 20Overtime Cost/day ? ? ? ? ? ? ? ? ? ? ? ?Total Overtime cost #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE!Overtime % ? h) In your opinion, would the union what to do this?

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