Capacity at Thomas Cope is governed by the number of machine operators it hires. The firm works 20 days a month, with a regular operating shift of eight hours per day. Any time beyond that is considered overtime. Regular-time pay is $15 per hour and overtime is $22 per hour. Overtime is limited to 20 hours per month per employee. The plant currently has 250 employees. Each seating requires two hours of labor input. It costs $3 to carry a seating in inventory for a month. Materials cost per seating is $40. Seating's are sold to distributors at a price of $125 each. We assume that no stock outs are allowed and the starting inventory entering November is 5,000 units and the desired ending inventory in April is also 5,000 units.

Market research has indicated that a promotion dropping prices by 5 percent in a given month will increase sales in that month by 20 percent and bring forward 10 percent demand from each of the following two months. 

Table - Anticipated Monthly Demand at Thomas Cope

  

a. Formulate the problem for the production plan for the six months if we assume no promotions.

Transcribed Image Text:

Month Demand Forecast November 10,000 December 11,000 January February March 16,000 19,000 22,000 April 25,000 Month Demand Forecast November 10,000 December 11,000 January February March 16,000 19,000 22,000 April 25,000

Answer rating: 100% (QA)

a Regular capacity per month 250 employees 20 days a month 8 hours per ... View the full answer