The Okra Colada

An okra farm anticipates highly seasonal demand for their product, tender pods of okra that can be made into the new drink sensation, the okra colada. Their estimate of the demand profile appears below. This forecast is based on the demand profile of last year's drink, the tuna colada. Once everyone in the test market had actually sampled the drink, demand fell to zero.

Month Demand Forecast

January 1,200

February 2,400

March 3,600

April 4,800

May 2,200

June 200

The costs for the managerial levers appear in this table.

Item Cost

Materials cost/unit $10

Inventory holding cost/unit/month $2

Marginal cost of stockout/unit/month $5

Hiring and training cost/worker $300

Layoff cost/worker $500

Labor hours required/unit 4

Regular time cost/hour $4

Over time cost/hour $6

Beginning inventory equals 1000

Ending inventory greater than 500

Marginal subcontracting cost/unit $30

The base price per okra colada is $40 per unit and there is no promotion, but management is seriously considering different promotional plans. The beginning workforce level is 80 workers.

Use the Okra Colada scenario to answer this question. What constraints are associated with the level of inventory at the end of each period when using linear programming to solve this sales and operations planning problem?

Group of answer choices

• EIJAN-MAY = 0
• EIJUNE 500, EIJAN-MAY = 0
• EIJAN-MAY 0
• EIJUNE 500, EIJAN-MAY 0