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An okra farm anticipates highly seasonal demand for their product, tender pods of okra that can be made into the new drink sensation , the
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 years drink, the tuna colada. Once everyone in the test market had actually sampled the drink, demand fell to zero.
Month: Jan, Feb, Mar, Apr, May, June
Forecast:
The costs for the managerial levers appear below.
Materials costunit: $
Inventory holding costunitmonth: $
Marginal cost of stockoutunitmonth: $
Hiring and training costworker: $
Layoff costworker: $
Labor hours requiredunit:
Regular time costhour: $
Over time costhour: $
Beginning inventory equals
Ending inventory greater than
Marginal subcontracting costunit: $
The base price per okra colada is $ per unit and there is no promotion, but management is seriously considering different promotional plans. The beginning workforce level is workers.
a Define and introduce decision variables when using linear programming to
solve this sales and operations planning problem. How many are there?
b Define and introduce constraints.
c Define and introduce the objective function.
d Solve this problem using the Excel solver.
e What is the ideal workforce level throughout JanuaryJune?
f What is the optimal total cost?
g What is the optimal profit?
h Which of the following statements is true when using linear programming to solve this sales and operations planning problem?
i 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 to 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 sixmonth planning period? Use an integer value in your answer.
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