Letherin Hides is a company that makes boots specifically targeting college students. Forecasts of sales for the
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Letherin Hides is a company that makes boots specifically targeting college students. Forecasts of sales for the next year are in the summer, in the autumn, and in the winter. Accessories that are used on the boots are purchased from a supplier for $ The cost of capital is estimated to be per year or per quarter; thus, the holding cost per item is $ $ per quarter rounded figure Letherin Hides hires freelance art designers at parttime to craft designs during the summer, and they earn $ per hour. In the autumn, labor is more difficult to keep, and the owner must pay $ per hour to retain qualified help. Because of the high demand for parttime help during the winter holiday season, labor rates are higher in the winter, and workers earn $ per hour. Each boot design takes hours to complete. How should production be planned over the three quarters to minimize the combined production and inventory holding costs?
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