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4. A small manufacturer of summer lawn games experiences unusual demand patterns during the year, especially leading up to the summer months. From September to
4. A small manufacturer of summer lawn games experiences unusual demand patterns during the year, especially leading up to the summer months. From September to February, demand is very predictable and usually about 350 each month, but every year, from March to August, demand is highly variable by month, but follows a predictable pattern. In June, July and August, production, setup and holding costs change because of summer vacations and the use of temporary workers and overtime. The operations manager has created the following table to summarize the situation. At the end of February, inventory is zero. In each month you can choose to produce for that or future months, with one setup. Demand in each month must be met in that month. 60 Month March April May June July August Demand 3000 1500 500 300 800 2000 Production cost/unit 50 50 50 50 60 2000 2000 2000 2000 Setup cost 3000 3000 1 1 1 2 Holding cost/unit/month 2 2 a. Using an appropriate algorithm, determine the best production quantities in each month from March to August. b. Will the result change if quarterly, weekly or daily planning periods were used? Explain (do not calculate)
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