Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tech manufactures and sells portable reading devices. At beginning of month 1, the company has $100,000 and 15 employees. Each machine the company owns has

Tech manufactures and sells portable reading devices. At beginning of month 1, the company has $100,000 and 15 employees. Each machine the company owns has the capacity to make up to 90 products per month, and each worker can make up to 600 products per month (both workers and machines are necessary for production). The company can't use more labor or machine capacity than is available in any given month. Also, the company wants to have non-negative cash balance at all points in time. The company's cost are as follows: Holding cost of $2 each month per product in ending inventory Cost in month 1 of buying machines is $3000/machine Monthly worker wage of $3500 Hiring cost of $4000 per worker Firing cost of $5000 per worker In the absence of advertising, the monthly demands in months 1 through 6 are forecasted to be 5000, 8000, 7000, 6000, 5000, and 5000. However, Tech can increase demand each month by advertising. Every $10 (up to maximum of $50,000 per month) spent on advertising during a month increases demand for that month by one products. The devices are sold for $75 each. The sequence of events in

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

Students also viewed these General Management questions