Plan production for a four-month period (February through May

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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Plan production for a four-month period (February through May).

 

Given information:

  • For February and March, you should produce to exact demand forecast.
  • For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workersneeded for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March).
  • If demand exceeds supply, then backorders occur.
  • There are 100 workers on January 31.
  • You are given the following demand forecast: February, 80,000; March, 64,000; April, 100,000; May, 40,000.
  • Productivity is four units per worker hour, eight hours per day, 20 days per month.
  • Assume zero inventory on February 1.
  • Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit.

 

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