Concept explainers
Design a production plan for FansForYou in Problem 14.6 using linear programming and Excel Solver.
FansForYou is a small, privately owned company that manufactures fans. Large variations in demand due to seasonality have contributed to high costs for the company. FansForYou currently uses a level production strategy because it prefers not to hire and fire employees.
However, if there is enough cost justification, the company will consider alternative production plans.
- a. What is the cost of the current production plan?
- b. How much would FansForYou save by using a chase demand strategy?
- c. How much would FansForYou save by keeping a steady workforce of 20 workers and supplementing with overtime and subcontracting as needed?
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