Management at the Orange Office Products Corporation (OOP) has determined the following demand schedule (in units): 6 9 Month Demand 1 600 2 800 3 1000 4 1400 5 2000 7 1400 8 1200 10 1400 11 2000 12 1500 1600 1000 An employee can produce an average of 10 units per month. Each worker on the payroll costs $2000 in regular-time wages per month. Each employee can produce 5 extra units per month on overtime, but it costs an additional $300 in overtime cost per unit produced in overtime. They also have the option of using a local subcontractor, but to do so cost an additional $250 per unit. Presently, 140 employees are on the payroll. OOP can hire and train new employee for $1000 and lay off one for $500. Inventory costs $40 per unit on hand based on average inventory at the end of each month. (25 points) The following policies are in place for all 3 plan options below: They are not allowed to use overtime nor subcontracting to build inventory No back-orders nor backlogs are permitted; they must fill all customer demand. There is no regular time under-utilization of production; must use regular production at 100% capacity each month. . 1. Compute a plan to meet all demand by using overtime and inventory (unlimited) as needed. No subcontracting is to be used and hiring and firing of workers is not allowed; other than a one time workforce adjustment at the beginning of the plan. They are not allowed to use overtime to build inventory. Determine the lowest total cost of this plan. 2. Compute a plan to meet all demand by using hiring and firing with a no overtime and no inventory policy. Subcontracting can be used and supply up to 50 additional units per month. Determine the lowest total cost of this plan. 3. Compute a mixed-hybrid production plan using a combination of inventory, overtime, subcontracting, hiring and firing and calculate its total cost. For this plan, the maximum number of employees that can be hired or laid-off in a single period at one time is 50 (this is only per period; not the entire plan). Furthermore, subcontractors can only supply up to 40 additional units per month and each employee can produce 5 extra units per month on overtime. Also, they are not allowed to use overtime nor subcontracting to build inventory. This mixed-strategy hybrid plan's cost MUST be less than the previous two plans. Management at the Orange Office Products Corporation (OOP) has determined the following demand schedule (in units): 6 9 Month Demand 1 600 2 800 3 1000 4 1400 5 2000 7 1400 8 1200 10 1400 11 2000 12 1500 1600 1000 An employee can produce an average of 10 units per month. Each worker on the payroll costs $2000 in regular-time wages per month. Each employee can produce 5 extra units per month on overtime, but it costs an additional $300 in overtime cost per unit produced in overtime. They also have the option of using a local subcontractor, but to do so cost an additional $250 per unit. Presently, 140 employees are on the payroll. OOP can hire and train new employee for $1000 and lay off one for $500. Inventory costs $40 per unit on hand based on average inventory at the end of each month. (25 points) The following policies are in place for all 3 plan options below: They are not allowed to use overtime nor subcontracting to build inventory No back-orders nor backlogs are permitted; they must fill all customer demand. There is no regular time under-utilization of production; must use regular production at 100% capacity each month. . 1. Compute a plan to meet all demand by using overtime and inventory (unlimited) as needed. No subcontracting is to be used and hiring and firing of workers is not allowed; other than a one time workforce adjustment at the beginning of the plan. They are not allowed to use overtime to build inventory. Determine the lowest total cost of this plan. 2. Compute a plan to meet all demand by using hiring and firing with a no overtime and no inventory policy. Subcontracting can be used and supply up to 50 additional units per month. Determine the lowest total cost of this plan. 3. Compute a mixed-hybrid production plan using a combination of inventory, overtime, subcontracting, hiring and firing and calculate its total cost. For this plan, the maximum number of employees that can be hired or laid-off in a single period at one time is 50 (this is only per period; not the entire plan). Furthermore, subcontractors can only supply up to 40 additional units per month and each employee can produce 5 extra units per month on overtime. Also, they are not allowed to use overtime nor subcontracting to build inventory. This mixed-strategy hybrid plan's cost MUST be less than the previous two plans
