A textile company produces shirts and pants. Each shirt requires two square yards of cloth, and each
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During each month a total of at most 2500 articles of clothing can be produced with regular-time labor, and an unlimited number of articles of clothing can be produced with overtime labor. At the end of each month, a holding cost of $3 per article of clothing is incurred.
a. Determine how to meet demands for the next two months (on time) at minimum cost. Assume that 100 shirts and 200 pairs of pants are already in inventory at the beginning of month 1.
b. Use a two-way SolverTable to investigate the effect on total cost of two simultaneous changes. The first change is to allow the ratio of overtime to regular time production cost (currently $16/$8 = 2) to decrease from 20% to 80% in increments of 20%, while keeping the regular time cost at $8. The second change is to allow the production capacity each month (currently 2500) to decrease by 10% to 50% in increments of 10%. The idea here is that less regular-time capacity is available, but overtime becomes relatively cheaper. Is the net effect on total cost positive or negative?
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Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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