The American National Bus Lines is proud of its 8-week bus driver training program that it conducts for all its drivers. Each 8-week training program costs the company $ 25000 for instructors, equipment and so on and is independent of the number of new drivers in the class as long as the class size remains less than or equal to 35. The training program must provide the company with 7 new fully trained drivers per month. After completing the training program, new drivers are paid $1800 per month but do not work until a full-time position is open. The company views the $1800 as holding cost necessary to maintain a supply of newly trained drivers available for immediate service. Viewing new drivers as inventory –type units, how large should the training classes be in order to minimize the total annual training and new driver idle-time costs? How many training classes should the company hold each year? What is the total annual cost of your recommendation?

The American National Bus Lines is proud of its 8-week bus driver training program that it conducts for all its drivers. Each 8-week training program costs the company $ 25000 for instructors, equipment and so on and is independent of the number of new drivers in the class as long as the class size remains less than or equal to 35. The training program must provide the company with 7 new fully trained drivers per month. After completing the training program, new drivers are paid $1800 per month but do not work until a full-time position is open. The company views the $1800 as holding cost necessary to maintain a supply of newly trained drivers available for immediate service. Viewing new drivers as inventory –type units, how large should the training classes be in order to minimize the total annual training and new driver idle-time costs? How many training classes should the company hold each year? What is the total annual cost of your recommendation?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 54P

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