Each year, Comfy Shoes faces demands (which must be met on time) for pairs of shoes as shown in below. ---------------Quarter 1------Quarter 2------Quarter 3------Quarter 4 Demand------6000------------3000-------------8000--------------1000 Employees work 3 consecutive quarters and then receive 1 quarter off. For example, a worker might work during quarters 3 and 4 of one year and quarter 1 of the next year. During a quarter in which an employee works, he or she can produce up to 500 pairs of shoes. Each worker is paid $5000 per quarter. At the end of each quarter, a holding cost of $10 per pair of shoes is assessed. a. Determine how to minimize the cost per year (labor plus holding) of meeting the demands for shoes. To simplify matters, assume that at the end of each year, the ending inventory is 0. (Hint: You may assume that a given worker will get the same quarter off during each year.) b. Suppose Comfy Shoes can pay a flat fee for a training program that will increase the productivity of all of its workers. Use Solver to see how much the company would be willing to pay for a training program that increases worker productivity from 500 pairs of shoes per quarter to P pairs of shoes per quarter, where P varies from 550 to 700 in increments of 50. (Hint: Run Solver for each value of P and save the minimum cost in a cell with the value of P.)
Each year, Comfy Shoes faces demands (which must be met on time) for pairs of shoes as shown in below.
---------------Quarter 1------Quarter 2------Quarter 3------Quarter 4
Demand------6000------------3000-------------8000--------------1000
Employees work 3 consecutive quarters and then receive 1 quarter off. For example, a worker might work during quarters 3 and 4 of one year and quarter 1 of the next year. During a quarter in which an employee works, he or she can produce up to 500 pairs of shoes. Each worker is paid $5000 per quarter. At the end of each quarter, a holding cost of $10 per pair of shoes is assessed.
a. Determine how to minimize the cost per year (labor plus holding) of meeting the demands for shoes. To simplify matters, assume that at the end of each year, the ending inventory is 0. (Hint: You may assume that a given worker will get the same quarter off during each year.)
b. Suppose Comfy Shoes can pay a flat fee for a training program that will increase the productivity of all of its workers. Use Solver to see how much the company would be willing to pay for a training program that increases worker productivity from 500 pairs of shoes per quarter to P pairs of shoes per quarter, where P varies from 550 to 700 in increments of 50. (Hint: Run Solver for each value of P and save the minimum cost in a cell with the value of P.)
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