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Lavare is a major manufacturer of stainless steel sinks. Anticipated monthly demand from distributors over 12 months is shown in table below: Month January February
Lavare is a major manufacturer of stainless steel sinks. Anticipated monthly demand from distributors over 12 months is shown in table below: Month January February March April May June Demand 10.000 11.000 15.000 18.000 25.000 26,000 Month July August September October November December Demand 30.000 29.000 21.000 18.000 14,000 11.000 Capacity at Lavare is governed by the number of machine operators it hires. The firm works 20 days a month with a regular operating shift of 8 hours per day. Anytime beyond that is considered overtime. Regular time pay is $15 per employee and overtime is $22 per hour. Overtime is limited to 20 hours per employee per month. The plant currently has 250 employees. Each sink requires 2 hours of labor input. It costs $3 to carry a sink in inventory for a month. Materials cost per sink is $40. Sinks are sold to distributors at a price of $125 each. We assume that no stockouts are allowed and the starting inventory entering January is 5,000 units. The desired ending inventory in December is also 5,000 units. What is the optimal production plan for the year? What is the cost of this plan? Lavare is a major manufacturer of stainless steel sinks. Anticipated monthly demand from distributors over 12 months is shown in table below: Month January February March April May June Demand 10.000 11.000 15.000 18.000 25.000 26,000 Month July August September October November December Demand 30.000 29.000 21.000 18.000 14,000 11.000 Capacity at Lavare is governed by the number of machine operators it hires. The firm works 20 days a month with a regular operating shift of 8 hours per day. Anytime beyond that is considered overtime. Regular time pay is $15 per employee and overtime is $22 per hour. Overtime is limited to 20 hours per employee per month. The plant currently has 250 employees. Each sink requires 2 hours of labor input. It costs $3 to carry a sink in inventory for a month. Materials cost per sink is $40. Sinks are sold to distributors at a price of $125 each. We assume that no stockouts are allowed and the starting inventory entering January is 5,000 units. The desired ending inventory in December is also 5,000 units. What is the optimal production plan for the year? What is the cost of this plan
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