Textbook Problem

Budget Auto produces inexpensive cars. Each car is sold for $12,500. The raw material in a car costs $8000. Labor time and robot time are needed to produce cars. A worker can do the needed labor on, at most, 100 cars per month; a robot can complete the needed work on, at most, 200 cars per month. The company currently has 10 workers. Each worker receives a monthly salary of $6000. It costs $2500 to hire a worker and $1000 to fire a worker. Hired workers are fully productive during the month they are hired. Robots must be bought at the beginning of month 1 at a cost of $20,000 per robot. The (assumed known) demand for cars is listed in the file P04_98.xlsx. At the end of each month, the company incurs a holding cost of $750 per car. How can the company maximize the profit earned during the next six months?