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Question 2 Alset Motor Inc. is determining its production schedule for the next four quarters. Demands for electric motorcycles are forecasted to be 400 in
Question 2 Alset Motor Inc. is determining its production schedule for the next four quarters. Demands for electric motorcycles are forecasted to be 400 in quarter 1; 700 in quarter 2; 500 in quarter 3; and 200 in quarter 4. Alset incurs four types of costs, as described below: I. It costs Alset $800 to manufacture each motorcycle II. At the end of each quarter, a holding cost of $100 per motorcycle left in inventory is incurred III. When production is increased from one quarter to the next, a cost is incurred, primarily for training employees. If the increase in production is X motorcycles, the cost is $700X IV. When production is decreased from one quarter to the next, a cost is incurred, primarily for severance pay and decreased morale. If the decrease in production is X motorcycles, the cost is $600X V. A quarter's production can be used to meet demand for the current quarter (as well as future quarters). VI. All demands must be met on time During the quarter immediately preceding quarter 1, 500 motorcycles were produced. Assume that at the beginning of quarter 1, no motorcycles are in inventory. a) Formulate and solve a linear spreadsheet model to help this company solve its problem. Label your Excel file as "FirstNameLastNameQ2A
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