Case Problem 4: Workforce Scheduling

1. Let tij = number of temporary employees hired under option i (i = 1, 2, 3) in month j (j = 1

for January, j = 2 for February and so on)

The following table depicts the decision variables used in this case problem.

Jan. Feb. Mar. Apr. May June

Option 1 t11 t12 t13 t14 t15 t16
Option 2 t21 t22 t23 t24 t25
Option 3 t31 t32 t33 t34

Costs: Contract cost plus training cost

Option Contract Cost Training Cost Total Cost

1 $2000 $875 $2875

2 $4800 $875 $5675
3 $7500 $875 $8375

Min. 2875(t11 + t12 + t13 + t14 + t15 + t16)

+ 5675(t21 + t22 + t23 + t24 + t25)
+ 8375(t31 + t32 + t33 + t34)

One constraint is required for each of the six months.

Constraint 1: Need 10 additional employees in January

t11 = number of temporary employees hired under Option 1 (one-month contract) in

January t21 = number of temporary employees hired under Option 2 (two-month contract)
in January t31 = number of temporary employees hired under Option 3 (three-
month contract) in January

t11 + t21 + t31 = 10

Constraint 2: Need 23 additional employees in February

t12 , t22 and t32 are the number of temporary employees hired under Options 1, 2 and 3 in
February.

But, temporary employees hired under Option 2 or Option 3 in January will also be available
to satisfy February needs.

t21 + t31 + t12 + t22 + t32 = 23

Note: The following table shows the decision variables used in this constraint

Jan. Feb. Mar. Apr. May June

Option 1 t12
Option 2 t21 t22
Option 3 t31 t32

Constraint 3: Need 19 additional employees in March

Jan. Feb. Mar. Apr. May June

Option 1 t13
Option 2 t22 t23
Option 3 t31 t32 t33

t31 + t22 + t32 + t13 + t23 + t33 = 19

Constraint 4: Need 26 additional employees in May

Jan. Feb. Mar. Apr. May June

Option 1 t14
Option 2 t23 t24
Option 3 t32 t33 t34

t32 + t23 + t33 + t14 + t24 + t34 = 26

Constraint 5: Need 20 additional employees in May

Jan. Feb. Mar. Apr. May June

Option 1 t15
Option 2 t24 t25
Option 3 t33 t34

t33 + t24 + t34 + t15 + t25 = 20

Constraint 6: Need 14 additional employees in June

Jan. Feb. Mar. Apr. May June

Option 1 t16
Option 2 t25
Option 3 t34

t34 + t25 + t16 = 14

 Optimal Solution: Total Cost = $313,525

Jan. Feb. Mar. Apr. May June

Option 1 0 1 0 0 6 0
Option 2 3 0 0 0 0
Option 3 7 12 0 14

2.
Option Number Hired Contract Cost Training Cost Total Cost

1 7 $14,000 $6,125 $20,125

2 3 $14,400 $2,625 $17,025
3 33 $247,500 $28,875 $276,375
Total: $275,900 $37,625 $313,525

3. Hiring 10 full-time employees at the beginning of January will reduce the number of
temporary employees needed each month by 10. Using the same linear programming model
with the righthand sides of 0, 13, 9, 16, 10 and 4, provides the following schedule for
temporary employees:

Jan. Feb. Mar. Apr. May June

Option 1 0 4 0 0 3 0
Option 2 0 0 0 3 0
Option 3 0 9 0 4

Option Number Hired Contract Cost Training Cost Total Cost

1 7 $14,000 $6,125 $20,125

2 3 $14,400 $2,625 $17,025
3 13 $97,500 $11,375 $108,875 Total: 23 $146,025

Full-time employees cost:

Training cost: 10($875) = $8,750

Salary: 10(6)(168)($16.50) = $166,320
Total Cost = $146,025 + $8750 + $166,320 = $321,095

Hiring 10 full-time employees is $321,095 - $313,525 = $7,570 more expensive than using
temporary employees. Do not hire the 10 full-time employees. Davis should continue to
contract with WorkForce to obtain temporary employees.

4. With the lower training costs, the costs per employee for each option are as follows:
 Option Cost Training Cost Total Cost

1 $2000 $700 $2700

2 $4800 $700 $5500
3 $7500 $700 $8200

Resolving the original linear programming model with the above costs indicates that Davis
should hire all temporary employees on a one-month contract specifically to meet each
month's employee needs. Thus, the monthly temporary hire schedule would be as follows:
January - 10; February - 23; March - 19; April - 26; May - 20; and June - 14. The total cost
of this strategy is $302,400. Note that if training costs were any lower, this would still be the
optimal hiring strategy for Davis.