Only solve E and F Harold Grey owns a small farm in the Salinas Valley that grows apricots. The apricots are dried onthe premises and sold to a number of large supermarket chains. Based on past experience andcommitted contracts, he estimates that sales over the next five years in thousands of packages will beas follows:Forecasted DemandYear (thousands of packages)300120200110135Onlysolve34part E,FAssume that each worker stays on the job for at least one year, and that Grey currently has threeworkers on the payroll. He estimates that he will have 20,000 packages on hand at the end of thecurrent year. Assume that, on the average, each worker is paid $25,000 per year and is responsiblefor producing 30,000 packages. Inventory costs have been estimated to be 4 cents per package peryear, and shortages are not allowed. Based on the effort of interviewing and training new workers,Farmer Grey estimates that it costs $500 for each worker hired. Severance pay amounts to $1,000 perworker.A. Assuming that shortages are not allowed, determine the minimum constant workforce that hewill need over the next five years.B. Evaluate the cost of the plan found in part (a).C. Graphically determine a production plan that changes the production rate exactly once duringthe five years and evaluate the cost of that plan.D. Graphically determine a production plan that changes the production rate exactly twice duringthe five years and evaluate the cost of that plan.E. Formulate this as a linear program.F. Solve the problem in (E) and round-off the solution and determine the cost of the resultingplan.

Answer E) Linear Program formulation is as follows: Decision variables: H = Number of workers hired…

Answered: E. Formulate this as a linear program.…

E. Formulate this as a linear program. F. Solve the problem in (E) and round-off the solution and determine the cost of the resulting plan

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 5E

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