A new product is planned to be manufactured for the following four weeks. The demands for cach week are 520, 720, 520, and 620 units, respectively. The company has a steady workforce of 10 employees but can hire and fire temporary workers, if necessary. The extra costs of hiring and firing in any week are $200 and $400 per worker, respectively. A permanent worker can produce 12 units per week, and a temporary worker can only produce 10 units per week. The company can produce more than needed in any week and carry the surplus over to a following week at a holding cost of $50 per unit per week. Develop an optimal hiring/firing policy for the company over the four-week planning horizon. Write down your models by hand and then solve by Excel. Can you hire less temporary employees if cost per employee increases by 25% without changing the current optimal solution? If yes why? If not why and what will be the maximum increase that the current system can allow?

A new product is planned to be manufactured for the following four weeks. The demands for cach week are 520, 720, 520, and 620 units, respectively. The company has a steady workforce of 10 employees but can hire and fire temporary workers, if necessary. The extra costs of hiring and firing in any week are $200 and $400 per worker, respectively. A permanent worker can produce 12 units per week, and a temporary worker can only produce 10 units per week. The company can produce more than needed in any week and carry the surplus over to a following week at a holding cost of $50 per unit per week. Develop an optimal hiring/firing policy for the company over the four-week planning horizon. Write down your models by hand and then solve by Excel. Can you hire less temporary employees if cost per employee increases by 25% without changing the current optimal solution? If yes why? If not why and what will be the maximum increase that the current system can allow?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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