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 sampled the drink, demand fell to zero.

Month January February March April May June Demand Forecast 1.200 2,400 3,600 4,800 2,200 200 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 With a base price of $40 per bushel of okra and no promotion, what is the optimal sales and operations plan? Assume that the beginning workforce level is set at 80 workers. Hint: The spreadsheet setup should assess this information: Period Hired Laid off Workers O/T Inventory Stockout Sub Production Use linear programming