A standard work year is 2000 hours at the Luther Mill and it takes about an hour and a half to fill a customer order. The manager at the mill is always concerned about employee idle time, so he aims for a capacity cushion of two percent. Last year saw 15,000 customer orders at the mill and the manager has a new John Deere in mind as a company car, so he hopes that there is an increase of 15% in customer orders for next year. How many workers will the manager need to have at the mill next year?

Explanation:

Customer orders for last year were 15000

Order for next year with 15% increase = 15000 x 1.15 = 17250

It takes 1.5 hours to fill a customer order

Cumulative amount of time required to fill customers order = 17250 x 1.5 = 25875

Given that standard work year = 2000 hours

Therefore , effective work year with 2 % capacity cushion

= Standard work year x ( 1 – Capacity cushion %/100)

= 2000 x 0.98  = 1960 hours

Number of workers needed by manager

= Cumulative amount of time required to fill customers orders / effective work year

= 25875 / 1960  = 13.20 which is 13 (rounded)

Manager will need 13 workers nex year

The manager will need Thirteen workers to fill in customers order by next year.

Explanation: to calculate how many employees needed, we will calculate it in steps.

STEP 1: Find the number of customers the manager is expecting next year. Since their will be a 15% increase.

15,000 × 15% = 2250

Therefore the expected customer is

2250 + 15,000 = 17,250

STEP2: How many hours should be used to fill all customers order by next year; since it takes one and half hour to fill a customers demand.

17,250 × 1.5 = 25,875hours

STEP3: How many hours does each employee gives a customer in a year; since 2% is used for their own relaxed time.

2000 × 2% = 40hours

Therefore;

2000 - 40 = 1960hours

STEP3: How many employees will be needed to satisfy 17,250 customers; since each employee works for 1960hour and the total hours to fill all customers order is 25,875hours

25,875 ÷ 1,960 = 13.202

Therefore the manager needs 13 workers to fill in customers order.