Budget Auto produces inexpensive cars. Each car is sold for $7900. The raw material in a car

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Budget Auto produces inexpensive cars. Each car is sold for $7900. The raw material in a car costs $5000. 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 four 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 $15,000 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 $200 per car. How can the company maximize the profit earned during the next six months?

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Practical Management Science

ISBN: 1497

5th Edition

Authors: Wayne L. Winston, Christian Albright

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