Question
Decorum Incorporated manufactures high-end ceiling fans. Their sales are seasonal with higher demand in the warmer summer months. Typically, sales average 400 units per month.
Decorum Incorporated manufactures high-end ceiling fans. Their sales are seasonal with higher demand in the warmer summer months. Typically, sales average 400 units per month. However, in the hot summer months (June, July, and August), sales spike up to 600 units per month. Decorum can produce up to 500 units per month at a cost of $305 each. By bringing in temporary workers, Decorum can produce up to an additional 75 units at a cost of $345 each. Decorum sells the ceiling fans for $510 each. Decorum can carry inventory from one month to the next, but at a cost of $15 per ceiling fan per month. Decorum has 15 units in inventory at the start of January.
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Build and solve a linear programming spreadsheet model to maximize the profit over all 12 months.
Assuming Decorum must produce enough ceiling fans to meet demand, how many ceiling fans should Decorum produce each month (using their regular labor force and/or temporary workers) over the course of the next year so as to maximize their total profit?
Determine the net profit.
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