САРАСITY SOURCE (UNITS) JAN. FEB. MAR. APR. MAY JUNE JULY AUG. Regular time 235 255 290 300 300 290 300 290 Overtime 20 24 26 24 30 28 30 30 Subcontract 12 16 15 17 17 19 19 20 Demand 255 294 321 301 330 320 345 340 ENRI

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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Dwayne Cole, owner of a F lorida firm that ma nufactures
display cabinets, develops an 8-month aggregate plan.
Demand and capacity (in units) a re fo recast as follows:                                                                            The cost of producing each unit is $1,000 on regular time, $ 1,300 on
overtime, and $1,800 on a subcontract. Inventory carrying cost is
$200 per unit per month. There is no beginning or ending inventory )
in stock, and no backorders are permitted from period to period. ~
Let the production (workforce) vary by using regular time
first, then overtime, and then subcontracting.
a) Set up a production plan that minimizes cost by producing
exactly what the demand is each month. This plan allows no
backorders or inventory. What is this plan's cost?
b) Through better p lanning, regular-time production can be set
at exactly the same amount, 275 units, per month. If demand
cannot be met there is no cost assigned to shortages and they
will not be filled. Does this a lter the solution?
c) lf overtime costs per unit rise from $1 ,300 to $ 1,400, will your
answer to (a) change? What if overtime costs then fall to $1 ,200?
САРАСITY
SOURCE (UNITS) JAN. FEB. MAR. APR. MAY JUNE JULY AUG.
Regular time
235 255
290 300 300 290 300 290
Overtime
20
24
26
24
30
28
30
30
Subcontract
12
16
15
17
17
19
19
20
Demand
255 294
321 301 330
320 345 340
ENRI
Transcribed Image Text:САРАСITY SOURCE (UNITS) JAN. FEB. MAR. APR. MAY JUNE JULY AUG. Regular time 235 255 290 300 300 290 300 290 Overtime 20 24 26 24 30 28 30 30 Subcontract 12 16 15 17 17 19 19 20 Demand 255 294 321 301 330 320 345 340 ENRI
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