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2. An okra farm anticipates highly seasonal demand for their product, tender pods of okra that can be made into the new drink sensation, the
2. An okra farm anticipates highly seasonal demand for their product, tender pods of okra that can be made into the new drink sensation, the okra colada. Their estimate of the demand profile appears below. This forecast is based on the demand profile of last year's drink, the tuna colada. Once everyone in the test market had actually sampled the drink, demand fell to zero. The costs for the managerial levers appear below. Materials cost/unit: $10 Inventory holding cost/unit/month: $2 Marginal cost of stockout/unit/month: \$5 Hiring and training cost/worker: $300 Layoff cost/worker: $500 Labor hours required/unit: 4 Regular time cost/hour: $4 Over time cost/hour: $6 Beginning inventory equals 1000 Ending inventory greater than 100 Marginal subcontracting cost/unit $30 The base price per okra colada is $40 per unit and there is no promotion, but management is seriously considering different promotional plans. The beginning workforce level is 80 workers. (a) Define and introduce decision variables when using linear programming to solve this sales and operations planning problem? How many are they? (b) Define and introduce constraints. (c) Definw and introduce the objective function. (d) Solve this problem using the Excel solver. You may use and modify the file, Chapter8.9 - examplesxisx posted in Britespace. Submit your Excel file in Britespace. (e) What is the ideal workforce level throughout January-June? (f) What is the optimal total cost? (g) What is the optimal protit? (h) Which of the following statements is true when using linear programming to solve this sales and operations planning problem? 1. More workers are hired than laid off. ii. More units are built using subcontracting than using overtime. iii. The number of stockouts exceeds the number of units in ending inventory from January-May: iv. The number of units subcontracted exceeds the number of stockouts that occur. (i) What is the minimum value for the cost of a single stockout to ensure that there are no stockouts during the six-month planning period? Use an integer value in your
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