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7. The Cramer Computer Company has the following projected demand for the next 6 months: Month No. of Working days in Month Demand 2.600 3,100

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7. The Cramer Computer Company has the following projected demand for the next 6 months: Month No. of Working days in Month Demand 2.600 3,100 3,700 4,300 3,500 3,300 There are currently 100 workers, each working a normal 8-hour shift, 5 days a week. They can work an extra 10 hours a week in overtime, but it costs the com- pany an extra $10 per hour in overtime costs. One of the computers takes 5 hours of worker time to produce. They can hire more workers at a cost of $3,000, with an additional cost of $5,000 if they lay off a worker. The company has a policy of not allowing shortages, but they are allowed inventory. Inventory costs $15 per month per unit based on average inventory levels for the month. There are no subcon- tractors for the units. There is a starting inventory of 60 units. Even though they have the "no shortage policy, if one does happen to occur they charge $150 per unit due to lost profit. Space will only allow them to have 110 workers. If they need more, they need to start a second shift. To do so increases the cost per worker by $1.50 per hour for a shift premium. A second shift also requires hiring support personnel (a supervi- sor, maintenance person, and material handler) at an additional cost of $20,000 per month Given all these conditions, find a satisfactory solution to help them minimize cost. (Hint: Do not look for an optimal solution. Instead try to set up the problem on a spreadsheet and look for patterns toward a good solution.)

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