Summerset, a major European cell phone manufacturer, is making production plans for the coming year. It has worked with its customers (the service providers) to come up with forecasts of monthly requirements (in thousands of phones) as shown in Table 1. Manufacturing is primarily an assembly operation, and capacity is governed by the number of people on the production line. The plant operates for 24 days a month, 8 hours each day. One person can assemble a phone every 15 minutes. Workers are paid 20 euros per hour and a 50 percent premium for overtime. The plant currently employs 1,500 workers. Component costs for each cell phone total 20 euros. Given the rapid decline in component and finished-product prices, carrying inventory from one month to the next incurs a cost of 3 euros per phone per month. Summerset currently has a no- layoff policy in place. Overtime is limited to a maximum of 20 hours per month per employee. Assume that Summerset has a starting inventory of 50,000 units and wants to end the year with the same level of inventory. Table 1. Monthly Demand for Cellphones, in Thousands Month Demand Jan 800 Feb 900 Mar 1,000 Apr 1,000 May 1,100 June 1,100 July 1,200 Aug 1,400 Sept 1,500 Oct 1,600 Nov 1,600 Dec 1,700 Submit your solution in MS Excel.
Summerset, a major European cell phone manufacturer, is making production plans for the coming year. It has worked with its customers (the service providers) to come up with forecasts of monthly requirements (in thousands of phones) as shown in Table 1. Manufacturing is primarily an assembly operation, and capacity is governed by the number of people on the production line. The plant operates for 24 days a month, 8 hours each day. One person can assemble a phone every 15 minutes. Workers are paid 20 euros per hour and a 50 percent premium for overtime. The plant currently employs 1,500 workers. Component costs for each cell phone total 20 euros. Given the rapid decline in component and finished-product prices, carrying inventory from one month to the next incurs a cost of 3 euros per phone per month. Summerset currently has a no- layoff policy in place. Overtime is limited to a maximum of 20 hours per month per employee. Assume that Summerset has a starting inventory of 50,000 units and wants to end the year with the same level of inventory. Table 1. Monthly Demand for Cellphones, in Thousands Month Demand Jan 800 Feb 900 Mar 1,000 Apr 1,000 May 1,100 June 1,100 July 1,200 Aug 1,400 Sept 1,500 Oct 1,600 Nov 1,600 Dec 1,700 Submit your solution in MS Excel.
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Transcribed Image Text:Summerset, a major European cell phone manufacturer, is making production plans for the coming year. It
has worked with its customers (the service providers) to come up with forecasts of monthly requirements (in
thousands of phones) as shown in Table 1. Manufacturing is primarily an assembly operation, and capacity is
governed by the number of people on the production line. The plant operates for 24 days a month, 8 hours
each day. One person can assemble a phone every 15 minutes. Workers are paid 20 euros per hour and a 50
percent premium for overtime. The plant currently employs 1,500 workers. Component costs for each cell
phone total 20 euros. Given the rapid decline in component and finished-product prices, carrying inventory
from one month to the next incurs a cost of 3 euros per phone per month. Summerset currently has a no-
layoff policy in place. Overtime is limited to a maximum of 20 hours per month per employee. Assume that
Summerset has a starting inventory of 50,000 units and wants to end the year with the same level of
inventory.
Transcribed Image Text:Table 1. Monthly Demand for Cellphones, in Thousands
Month
Demand
Jan
800
Feb
900
Mar
1,000
Apr
1,000
May
1,100
June
1,100
July
1,200
Aug
1,400
Sept
1,500
Oct
1,600
Nov
1,600
Dec
1,700
Submit your solution in MS Excel.
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