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Comfort Plus Inc. (CPI) manufactures a standard dining chair used in restaurants.  The demand forecasts for quarter 1 (January–March) and quarter 2 (April–June) are 3700 chairs and 4200 chairs, respectively.  CPI has a policy of satisfying all demand in the quarter in which it occurs. The chair contains an upholstered seat that can be produced by CPI or purchased from DAP, a subcontractor.  DAP currently charges $12.50 per seat, but has announced a new price of $13.75, effective April 1.  CPI can produce the seat at a cost of $10.25.   CPI can produce up to 3800 seats per quarter. Seats that are produced or purchased in quarter 1 and used to satisfy demand in quarter 2 cost CPI $1.50 each to hold in inventory, but maximum inventory cannot exceed 300 seats. Define the decision variables needed to model this problem. Give the objection function. Write the constraints. What is the final answer? Explain in detail.

Comfort Plus Inc. (CPI) manufactures a standard dining chair used in restaurants.  The demand forecasts for quarter 1 (January–March) and quarter 2 (April–June) are 3700 chairs and 4200 chairs, respectively.  CPI has a policy of satisfying all demand in the quarter in which it occurs. The chair contains an upholstered seat that can be produced by CPI or purchased from DAP, a subcontractor.  DAP currently charges $12.50 per seat, but has announced a new price of $13.75, effective April 1.  CPI can produce the seat at a cost of $10.25.   CPI can produce up to 3800 seats per quarter. Seats that are produced or purchased in quarter 1 and used to satisfy demand in quarter 2 cost CPI $1.50 each to hold in inventory, but maximum inventory cannot exceed 300 seats. Define the decision variables needed to model this problem. Give the objection function. Write the constraints. What is the final answer? Explain in detail.

Practical Management Science
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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Comfort Plus Inc. (CPI) manufactures a standard dining chair used in restaurants.  The demand forecasts for quarter 1 (January–March) and quarter 2 (April–June) are 3700 chairs and 4200 chairs, respectively.  CPI has a policy of satisfying all demand in the quarter in which it occurs. The chair contains an upholstered seat that can be produced by CPI or purchased from DAP, a subcontractor.  DAP currently charges $12.50 per seat, but has announced a new price of $13.75, effective April 1.  CPI can produce the seat at a cost of $10.25.   CPI can produce up to 3800 seats per quarter. Seats that are produced or purchased in quarter 1 and used to satisfy demand in quarter 2 cost CPI $1.50 each to hold in inventory, but maximum inventory cannot exceed 300 seats.

  1. Define the decision variables needed to model this problem.
  2. Give the objection function.
  3. Write the constraints.
  4. What is the final answer? Explain in detail.
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