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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Related questions

Question

Dwayne Cole, owner of a F lorida firm that ma nufactures
display cabinets, develops an 8-month aggregate plan.
Demand and capacity (in units) a re fo recast as follows: The cost of producing each unit is $1,000 on regular time, $ 1,300 on
overtime, and $1,800 on a subcontract. Inventory carrying cost is
$200 per unit per month. There is no beginning or ending inventory )
in stock, and no backorders are permitted from period to period. ~
Let the production (workforce) vary by using regular time
first, then overtime, and then subcontracting.
a) Set up a production plan that minimizes cost by producing
exactly what the demand is each month. This plan allows no
backorders or inventory. What is this plan's cost?
b) Through better p lanning, regular-time production can be set
at exactly the same amount, 275 units, per month. If demand
cannot be met there is no cost assigned to shortages and they
will not be filled. Does this a lter the solution?
c) lf overtime costs per unit rise from $1 ,300 to $ 1,400, will your
answer to (a) change? What if overtime costs then fall to $1 ,200?