Assignment 2 Q1: Suppose the company has identified the following three possible demand scenarios: Demand (Units per year) 25,000 60,000 100,000 Probability 0.3 0.4 0.3 1. If the capacity is set at 80,000, how much of a capacity cushion is here? What is the capacity utilization? 2. What is the probability of idle capacity if the capacity is 80,000? 3. If it costs $25 per units lost business and $50 to build a unit of capacity, how much capacity should be built to minimize total cost? Q2: A company has seasonal demand, with the forecast for the next 12 months as given below. The current labor force can produce 500 units per month. Each employee can produce 20 units per month, and is paid $2,000 per month. The inventory carrying cost is $50 per unit per period. It costs $100 to hire or layoff an employee. Assume 200 units of initial inventory and we would like to keep the similar level at the end of the year. 4 7 Month Demand 1 660 2 700 3 840 5 660 6 500 8 840 9 80 10 900 11 700 12 600 700 600 Please use level and chase strategy to calculate the total cost of two plans (please show your work). Q3: The table below includes information about four jobs and three work centers. Please use the following priority order, 1, 2, 3, 4 to develop a Gantt chart. What is the makespan? Job 1 2 3 4 Work center A/2 B/1, C/4 C/4, A/2 B/4, A/2 B/4, A/2, 0/3