CAN YOU PLEASE ANSWER 8.2 IN AN EXCEL WITH SOLVER SOLUTIONS?? I WOULD BE GREATLY APPRECIATIVE

. Skycell, a major European cell phone manufacturer, is mak-ing production plans for the coming year. Skycell has worked with its customers (the service providers) to come up with forecasts of monthly requirements (in thousands of phones) as shown in Table 8-10. Manufacturing is primarily an assembly operation, and capacity is governed by the number of people on the production line. The plant operates for 20 days a month, eight hours each day. One person can assemble a phone every 10 minutes. Workers are paid 20 euros per hour and a 50 percent premium for overtime. The plant currently employs 1,250 workers. Component costs for each cell phone total 20 euros. Given the rapid decline in component and finishedproduct prices, carrying inventory from one month to the next incurs a cost of 3 euros per phone per month. Skycell currently has a no-layoff policy in place. Overtime is limited to a maximum of 20 hours per month per employee. Assume that Skycell has a starting inventory of 50,000 units and wants to end the year with the same level of inventory.

a. Assuming no backlogs, no subcontracting, and no new hires, what is the optimum production schedule? What is the annual cost of this schedule?

b. Is there any value for management to negotiate an increase of allowed overtime per employee per month from 20 hours to 40?

c. Reconsider parts (a) and (b) if Skycell starts with only 1,200 employees. Reconsider parts (a) and (b) if Skycell starts with 1,300 employees. What happens to the value of additional overtime as the workforce size decreases?

d. Consider part (a) for the case in which Skycell aims for a level production schedule such that the quantity produced each month does not exceed the average demand over the next 12 months (1,241,667) by 50,000 units. Thus, monthly production, including overtime, should be no more than 1,291,667. What would be the cost of this level production schedule? What is the value of overtime flexibility?

8.2. Reconsider the Skycell data in Exercise 1.

Assume that the plant has 1,250 employees and a no-layoff policy. Overtime is limited to 20 hours per employee per month. A third party has offered to produce cell phones as needed at a cost of $26 per unit (this includes component costs of $20 per unit).

a. What is the average per unit cost of in-house production (including inventory holding and overtime cost) if the third party is not used?

b. How should Skycell use the third party? How does your answer change if the third party offers a price of $25 per unit?

c. Should Skycell use the third party if the per unit cost is $28?

d. Why would Skycell use the third party even when the per-unit cost of the third party is higher than the average per-unit cost (including inventory holding and overtime) for inhouse production?

Period 1 2 3 4 5 6 Month Demand Jan 1000 Feb 1100 Mar 1000 Apr 1200 May 1500 Jun 1600 Jul 1600 Aug 900 Sep 1100 Oct 800 Nov 1400 Dec 1700 7 8 9 10 11 12