The Silver Star Bicycle Company will be manufacturing both men's and women's models of its Easy-Pedal 10-speed bicycles during the next two months. Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current demand forecasts call for 150 men's and 125 women's models to be shipped during the first month and 200 men's and 150 women's models to be shipped during the second month. Additional data are shown: Model Men's Women's Production Costs $150 $120 Labor Requirements (hours) Assembly 1.6 0.9 Manufacturing 1.9 1.7 Current Inventory 30 40 Last month the company used a total of 1000 hours of labor. The company's labor relations policy will not allow the combined total hours of labor (manufacturing plus assembly) to increase or decrease by more than 100 hours from month to month. In addition, the company charges monthly inventory at the rate of 2% of the production cost based on the inventory levels at the end of the month. The company would like to have at least 35 units of each model in inventory at the end of the two months. a. Establish a production schedule that minimizes production and inventory costs and satisfies the labor-smoothing, demand, and inventory requirements. What inventories will be maintained, and what are the monthly labor requirements? If required, round your answers to the nearest whole number.
The Silver Star Bicycle Company will be manufacturing both men's and women's models of its Easy-Pedal 10-speed bicycles during the next two months. Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current demand forecasts call for 150 men's and 125 women's models to be shipped during the first month and 200 men's and 150 women's models to be shipped during the second month. Additional data are shown: Model Men's Women's Production Costs $150 $120 Labor Requirements (hours) Assembly 1.6 0.9 Manufacturing 1.9 1.7 Current Inventory 30 40 Last month the company used a total of 1000 hours of labor. The company's labor relations policy will not allow the combined total hours of labor (manufacturing plus assembly) to increase or decrease by more than 100 hours from month to month. In addition, the company charges monthly inventory at the rate of 2% of the production cost based on the inventory levels at the end of the month. The company would like to have at least 35 units of each model in inventory at the end of the two months. a. Establish a production schedule that minimizes production and inventory costs and satisfies the labor-smoothing, demand, and inventory requirements. What inventories will be maintained, and what are the monthly labor requirements? If required, round your answers to the nearest whole number.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Transcribed Image Text:Problem 4-19 (Algorithmic)
The Silver Star Bicycle Company will be manufacturing both men's and women's models of its Easy-Pedal 10-speed bicycles during the next two months.
Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current demand forecasts
call for 150 men's and 125 women's models to be shipped during the first month and 200 men's and 150 women's models to be shipped during the second
month. Additional data are shown:
Model
Men's
Women's
Production
Costs
$150
$120
Production schedule:
Labor Requirements (hours)
Assembly
1.6
0.9
Last month the company used a total of 1000 hours of labor. The company's labor relations policy will not allow the combined total hours of labor (manufacturing
plus assembly) to increase or decrease by more than 100 hours from month to month. In addition, the company charges monthly inventory at the rate of 2% of
the production cost based on the inventory levels at the end of the month. The company would like to have at least 35 units of each model in inventory at the
end of the two months.
The optimal solution is to produce
women's model in month 1, and
Total Cost = $
Manufacturing
1.9
1.7
a. Establish a production schedule that minimizes production and inventory costs and satisfies the labor-smoothing, demand, and inventory requirements. What
inventories will be maintained, and what are the monthly labor requirements? If required, round your answers to the nearest whole number.
Current
Inventory
30
40
of the men's model in month 1,
of the women's model in month 2.
of the men's model in month 2,
units of the
Transcribed Image Text:Month 1
Month 2
Previous month
Month 1
Labor Levels
Month 2
Inventory Schedule
Production schedule:
$
Men's
Total Cost = $
Men's
hours
hours
hours
b. If the company changed the constraints so that monthly labor increases and decreases could not exceed 50 hours, what would happen to the production
schedule? If required, round your answers to the nearest whole number.
The optimal solution is to produce
women's model in month 1, and
How much will the cost increase?
Women's
Women's
of the men's model in month 1,
of the women's model in month 2.
of the men's model in month 2,
units of the
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