1. Skycell, a major European cell phone manufacturer, is mak- ing production plans for the coming year. Skycell has worked with its customers (the service providers) to come up with forecasts of monthly requirements (in thousands of phones) as shown in Table 8-10. Manufacturing is primarily an assembly operation, and capacity is governed by the number of people on the production line. The plant operates for 20 days a month, eight hours each day. One person can assemble a phone every 10 minutes. Workers are paid 20 euros per hour and a 50 per- cent premium for overtime. The plant currently employs 1,250 workers. Component costs for each cell phone total 20 euros. Given the rapid decline in component and nished- product prices, carrying inventory from one month to the next incurs a cost of 3 euros per phone per month. Skycell currently has a no-layoff policy in place. Overtime is limited to a maximum of 20 hours per month per employee. Assume that Skycell has a starting inventory of 50,000 units and wants to end the year with the same level of inventory. Monthly Demand for Cell Phones, TABLE 8'10 in Thousands Month Demand a. Assuming no backlogs, no subcontracting, and no new hires, What is the optimum production schedule? What is January 1'000 the annual cost of this schedule\"?I February 1,100 b. Is there any value for management to negotiate an increase M of allowed overtime per employee per month from 21] hours to 40? April 1200 c. Reconsider parts (a) and (b) if Skycell starts with only May 1,500 1,200 employees. Reconsider parts (a) and (b) if Skycell June 1 600 starts with 1,300 employees. What happens to the value of ' additional overtime as the workforce size decreases? JUIY 11500 d. Consider part (a) for the case in which Skycell aims for a August 900 level production schedule such that the quantity pro- September1100 duced each month does not exceed the average demand ' over the next 12 months (1,241,667) by 50,000 units. October 800 Thus, monthly production, including overtime, should be November 1,4100 no more than 1,291,667. What would be the cost of this December 1,700 level production schedule? What is the value of overtime exibility T