Chapter 5.2, Problem 7P

a.

Explanation of Solution

Hiring and firing policy

• The production plan includes hiring employees per month.
• At the beginning of each month workers can be hired or fired.
• Let $h_t$ be the number of workers hired at the beginning of month $t$

b.

Explanation of Solution

Overtime labour

“Yes”, if overtime labour costs $16 per hour, then overtime labour should be used.

Reason

• Overtime labour is the amount of workers available beyond normal working time...

c.

Explanation of Solution

Optimum solution

• The new optimum solution value is calculated by the given formula:

  $\text{New value = Old value – }\left(\text{Key column value × Key row value}\right)\text{ / Key value}$

• The key row value can be calculated by the given formula:

  

d.

Explanation of Solution

Optimum solution

• The new optimum solution value is calculated by the given formula:

  $\text{New value = Old value – }\left(\text{Key column value × Key row value}\right)\text{ / Key value}$

• The key row value can be calculated by the given formula:

  

e.

Explanation of Solution

Total costs

• The new optimum solution value is calculated by the given formula:

  $\text{New value = Old value – }\left(\text{Key column value × Key row value}\right)\text{ / Key value}$

• The key row value can be calculated by the given f

f.

Explanation of Solution

Optimum solution

• The new optimum solution value is calculated by the given formula:

  $\text{New value = Old value – }\left(\text{Key column value × Key row value}\right)\text{ / Key value}$

• The key row value can be calculated by the given formula:

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g.

Explanation of Solution

Total costs

• The new optimum solution value is calculated by the given formula:

  $\text{New value = Old value – }\left(\text{Key column value × Key row value}\right)\text{ / Key value}$

• The key row value can be calculated by the given fo