Mondo Motorcycles is determining its production schedule for the next four quarters. De- mand for motorcycles will be as follows: quarter 1-40; quarter 2-70; quarter 3-50%3; quarter 4 20. Mondo incurs four types of costs. 1 It costs Mondo $400 to manufacture each motorcycle. 2 At the end of each quarter, a holding cost of $100 per motorcycle is incurred. 3 Increasing production from one quarter to the next incurs costs for training employ- ees. It is estimated that a cost of $700 per motorcycle is incurred if production is increased from one quarter to the next.
Mondo Motorcycles is determining its production schedule for the next four quarters. De- mand for motorcycles will be as follows: quarter 1-40; quarter 2-70; quarter 3-50%3; quarter 4 20. Mondo incurs four types of costs. 1 It costs Mondo $400 to manufacture each motorcycle. 2 At the end of each quarter, a holding cost of $100 per motorcycle is incurred. 3 Increasing production from one quarter to the next incurs costs for training employ- ees. It is estimated that a cost of $700 per motorcycle is incurred if production is increased from one quarter to the next.
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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![Problem (1)
Mondo Motorcycles is determining its production schedule for the next four quarters. De-
mand for motorcycles will be as follows: quarter 1-40; quarter 2-70; quarter 3-50;
quarter 4 20. Mondo incurs four types of costs.
1 It costs Mondo $400 to manufacture each motorcycle.
2 At the end of each quarter, a holding cost of S100 per motorcycle is incurred.
3 Increasing production from one quarter to the next incurs costs for training employ-
ees. It is estimated that a cost of $700 per motorcycle is incurred if production is increased
from one quarter to the next.
4 Decreasing production from one quarter to the next incurs costs for severance pay, de-
creasing morale, and so forth. It is estimated that a cost of $600 per motoreycle is in-
curred if production is decreased from one quarter to the next.
All demands must be met on time, and a quarter's production may be used to meet de-
mand for the current quarter. During the quarter immediately preceding quarter 1, 50 Mon-
dos were produced. Assume that at the beginning of quarter 1, no Mondos are in inventory.
Formulate an LP that minimizes Mondo's total cost during the next four quarters.
Discuss your answer?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fee3be6d7-d0a0-48d4-95e5-8f370a5ea580%2Ffef91a9a-c0a1-4b45-8bef-e3bdab79a432%2Flqhqdvh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem (1)
Mondo Motorcycles is determining its production schedule for the next four quarters. De-
mand for motorcycles will be as follows: quarter 1-40; quarter 2-70; quarter 3-50;
quarter 4 20. Mondo incurs four types of costs.
1 It costs Mondo $400 to manufacture each motorcycle.
2 At the end of each quarter, a holding cost of S100 per motorcycle is incurred.
3 Increasing production from one quarter to the next incurs costs for training employ-
ees. It is estimated that a cost of $700 per motorcycle is incurred if production is increased
from one quarter to the next.
4 Decreasing production from one quarter to the next incurs costs for severance pay, de-
creasing morale, and so forth. It is estimated that a cost of $600 per motoreycle is in-
curred if production is decreased from one quarter to the next.
All demands must be met on time, and a quarter's production may be used to meet de-
mand for the current quarter. During the quarter immediately preceding quarter 1, 50 Mon-
dos were produced. Assume that at the beginning of quarter 1, no Mondos are in inventory.
Formulate an LP that minimizes Mondo's total cost during the next four quarters.
Discuss your answer?
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