N2

The company Cremitas S.L. is dedicated to the production, transport and marketing of skin care creams. The company is currently planning production for the next quarter. They have identified that they can produce diamos in two shifts and, if they need to expand their capacity, they can open a night shift. The monthly production capacity, during daytime hours, is 10,850 units/month, while at nighttime, the monthly production capacity is 7,750 units/month. The monthly demand is 12,000 units the first month, 13,500 units the second month and 14,500 units the third month.

The costs of producing a unit on the day shift are $15/unit and on the night shift, $25/unit. If desired, one month's product can be put in stock for subsequent months, at a cost of $8/unit-month. There is no initial stock and no final stock is to be created

Instructions:

Prepare the following production analysis

a. What is the optimal production plan? b. What is the cost of this production plan?

c. What would be the cost of the production plan if the production capacity

d. What would be the cost of the production plan if the storage cost was $10/unit-month?

e. How much would the cost of the production plan increase if it were necessary to store in stock 40 units for month 4?

in daytime in month 2 will it increase by 50 units?