The Sales&Operations (S&OP) process is designed to produce a plan that all departments within the organization, as well as suppliers to the organization, can work. The process is also sometimes referred to as sales, inventory, and operations planning (SIOP) to emphasize the important role that inventory can play as a
PROBLEM-3) The Sales&Operations (S&OP) process is designed to produce a plan that all departments
within the organization, as well as suppliers to the organization, can work. The process is also sometimes referred to
as sales, inventory, and operations planning (SIOP) to emphasize the important role that inventory can play as a
buffer between sales planning and operations planning. The S&OP department of the XYZ company, that produces
KLM products, estimates the sales over the next six years in thousands of packages will be as follows:
Assume that each worker stays on the job for at least one year and XYZ currently has eight workers. XYZ estimates
that they will have 600000 packages on hand at the end of the current year. Assume that, on average, each
worker is paid TL 60000 per year and is responsible for producing 80000 packages. Inventory costs have been
estimated to be 20 KRS per package per year, and shortages are not allowed. XYZ estimates that it costs TL 2500
for each worker hired. Severance pay amounts to TL 3,000 per worker.
a. Assuming that shortages are not allowed, determine the minimum constant workforce that he will need
over the next six years.
b. Formulate this as a linear program.
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