Corporate tax returns each require 4 hours of an accountant’s time, and personal returns each require 90 minutes. During tax season, each accountant can work up to 10 hours per day. However, error rates increase to unacceptable levels when accountants work more than five consecutive days per week.
Hint: Read Supplement D before doing this problem.
Let x i= number for each working schedule, e.g., x 1= num- ber for Tuesday through Saturday.
A. Create an effective and efficient work schedule by for- mulating the problem as a Linear Program and solve using POM for Windows.
B. Assume that management has decided to offer a pay differential to those accountants who are scheduled to work on a weekend day. Normally, accountant earn $1,200 per week, but management will pay bonus of $100 for Saturday work and $150 for Sundays work. What schedule will cover all demand as well as minimize payroll cost?
C. Assume that little 6 has three part-time employees available to work Friday, Saturday, and Sunday at a rate of $800. Could these employees be costly effectively Utilized?
Now let’s talk a bit about problem 14. The real problem is understanding the total labor hours required within the specified time frame, seven (7) days. We start by understanding the level of effort required by each day and the aggregate time required. What is not given in the problem is the number of full time equivalents (FTE) (accountants) that are available only the constraint that they should not work more than ten (10) hours per day due to an unacceptable error rate above that work day and that they can not work more than five (5) consecutive days. We are also given three (3) part time equivalents (PTE).
Day # of Returns Level of Effort (LOE) (hrs) Aggregate LOE (in hours) FTE # of accountants
PTR PTR
CTR CTR
Monday 24 36 100 10 10
16 64
Tuesday 14 21 61 6.1 6
10 40
Wednesday 18 27 75 7.5 8
12 48
Thursday 18 27 87 8.7 9
15 60
Friday 10 15 111 11.1 12
24 96
Saturday 28 42 90 9 9
12 48
Sunday 16 24 40 4 4
4 16
As can be seen, we need a total of 10 FTEs to meet the demand of hours on Monday and Friday. We will need a total of 10 FTEs and 1 PTE on Friday. We will assume the risk that a 0.1 hour of additional work will not create a significant error rate. PTEs are only available on Friday, Saturday, and Sunday. PTEs can only work 5 days or 50 hours (10 hours per day a maximum of 5 days consecutively). The only day we will exceed FTE hours available will be Friday. We will use two of our PTEs to fill that requirement. Unlike the previous assumption on Monday, we will assume that the 0.1 FTE is an unacceptable risk because of the large total volume of returns on Friday. Giving 4 employees off on Tuesday, 2 on Wednesday, and one on Thursday will ensure that we have sufficient Friday to meet demand and on Saturday using our 3 PTEs will meet demand. Sunday is a 3 PTE and one FTE day. You can figure costs from there. A real world point, the PTE would not qualify for the premiums on Saturday / Sunday work. PTEs are also a non-burdened rate or cost of labor as they do not have benefits. They do however, incur taxes on their labor (withholding, SS, unemployment, Medicare, etc.). A flat labor rate is highly unlikely and you would need to compute the actual fully loaded labor rate for each individual up to 40 hours per week. After that point, only taxes would be computed into the labor rate, unless of course there is a matching 401K contribution, then that gets added into the rate beyond 40 hours.
With you in the role as boss and I in the role as employee; respond to the above solution set in one page or less with your thoughts, guidance, and directions to me as the scheduler as to how you wish to proceed to solving this issue.
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