(d) The company only has 4 workstations available. If it only operates its 4stations, how many weeks does it need to meet the production requirements?(e) The company has other contracts it needs to satisfy. Working on themugs more than 4 weeks means it will have to cancel another contract,incurring a penalty of $4,500. Each new workstation costs the company$2,500. What should the company do: cancel the contract or buy therequired workstations? A novelty coffee mug manufacturer produces 5 different designs thatare sold at tourist information kiosks. The demand requirements for the com-ing tourist season is as follows:DesignDemand (units) 500 750 600 800 450BCDEThe mugs can all be produced in the same workstations, but require differentprocessing and setup times. The production information is in the followingtable:DesignBatch Size (units)ACDE5050505050Setup Time (hr/batch)Processing Time (hr/unit) 0.15 0.15 0.25 0.25 0.102.541.5The company wants to produce all the required mugs in one four-week pe-riod. It currently operates workstations that work 8 hours per day, 5 days perweek, with a capacity cushion of 20%.3.

If the company operates with 4 work stations(without capacity cushion) then some setups would happen…

Answered: A novelty coffee mug manufacturer…

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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(d) The company only has 4 workstations available. If it only operates its 4
stations, how many weeks does it need to meet the production requirements?
(e) The company has other contracts it needs to satisfy. Working on the
mugs more than 4 weeks means it will have to cancel another contract,
incurring a penalty of $4,500. Each new workstation costs the company
$2,500. What should the company do: cancel the contract or buy the
required workstations?

A novelty coffee mug manufacturer produces 5 different designs that
are sold at tourist information kiosks. The demand requirements for the com-
ing tourist season is as follows:
Design
Demand (units) 500 750 600 800 450
B
C
D
E
The mugs can all be produced in the same workstations, but require different
processing and setup times. The production information is in the following
table:
Design
Batch Size (units)
A
C
D
E
50
50
50
50
50
Setup Time (hr/batch)
Processing Time (hr/unit) 0.15 0.15 0.25 0.25 0.10
2.5
4
1.5
The company wants to produce all the required mugs in one four-week pe-
riod. It currently operates workstations that work 8 hours per day, 5 days per
week, with a capacity cushion of 20%.
3.

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