Question
Mr. Meadows Cookie Company makes a variety of chocolate chip cookies in the plant in Albion, Michigan. Based on orders received and forecasts of buying
Mr. Meadows Cookie Company makes a variety of chocolate chip cookies in the plant in Albion, Michigan. Based on orders received and forecasts of buying habits, it is assumed that the demand for the next four months is 850, 1260, 510 and 980, expressed in thousands of cookies. During a 46- day period when there were 120 workers, the company produced 1.7 million cookies. Assume that the numbers of workdays over the four months are respectively 26, 24, 20 and 16. Beginning inventory is zero and it is required that there be at least 200 thousand units in the inventory at the end of four months. Assume a constant workforce policy with an initial workforce of 138 employees. There is no subcontracting, backlogging or lost sale. The inventory holding cost is $0.10 per cookie per month. Assume cost per cookie produced during regular time, over time, and productivity loss because of idle time are $3, $4, $1, respectively. Determine the production policy with the associated total cost such that there is no hiring or firing of workers by formulating a Ii near program and solving it using MS Excel Solver.
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