Solar power is usable energy generated from the sun in the form of electric or thermal energy. GreenHouse is specialized in installing solar panels which will provide all the needed electricity needs for a house (and beyond) throughout the year. GreenHouse operates 22 days a month, eight hours each day, with monthly demand in the table below. One worker can assemble a panel every 15 minutes. Workers are paid 21 KD per hour and a 50% premium for overtime. The plant currently has 400 workers. Component cost for each panel totals 2.5 KD, and inventory cost is 1 KD per panel per month. Overtime is limited to a maximum of 12 hours per month per employee. The cost of hiring a worker is 300 KD and the cost of laying off a worker is 250 KD. Assume that the plant has a starting inventory of 10,000 units and want to end the year with the same level of inventory. Furthermore, there are no backlogs, and no subcontracting.

a) Prepare a production plan using the Chase strategy and report the cost of this plan.

b) What is the optimum production schedule to maximize the profits? What is the cost per unit?

c) A third party has offered to assemble the panels at a cost of 8.5 KD per unit. Do you recommend using the 3rd party? If yes, how should they be used?

 

Month Demand Month Demand Jan 988,000 Jul 1,352,000 Feb 1,040,000 Aug 1,404,000 Mar 1,087,000 Sep 1,040,000 884,000 Oct 1,196,000 Apr ay 1,508,000 Nov 988,000 Jun 1,300,000 Dec 1,248,000