Question
DurableBoots, Inc, is a manufacturer of hiking boots. Demand for boots is highly seasonal. In particular, the demand for the next four quarters is expected
DurableBoots, Inc, is a manufacturer of hiking boots. Demand for boots is highly seasonal. In particular, the demand for the next four quarters is expected to be 3,000, 4,000, 8,000, and 7,000 pairs of boots. With its current production facility, the company can produce at most 6,000 pairs of boots in any quarter. Due to its exceptional reputation for high quality product, its customers are typically loyal and are willing to wait for the next batch if stockouts arise. In this case, any shortages will be backlogged and be satisfied during the next quarter. DurableBoots wishes to restrict backorders to be no more than 500 pairs for each of the next four quarters. By the end of each quarter, each pair of boots held in inventory will incur an inventory holding cost of $8, and each pair of boots backordered will incur a shortage cost of $16. Assume that DurableBoots starts with an inventory of 1000 pairs of boots. Determine a production plan that will minimize the total cost (inventory holding cost and shortage cost) for DurableBoots during the next four quarters. Template below. Pls solve quick with all the formulas for excel!
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