Cornwell Glass produces replacement automobile glass for all makes of cars. Cornwell has a sophisticated forecasting system

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Cornwell Glass produces replacement automobile glass for all makes of cars. Cornwell has a sophisticated forecasting system that uses data from past years to find seasonal factors and long-term trends. The system uses data from past weeks to find recent trends. The following table presents the forecasted demands for the coming year on a weekly basis.
Demand Week Demand Week 15 1,829 April November 4 1,864 22 1,820 11 1,989 29 1,887 18 2098 25 2,244 May 1,958 13 2,011 D
July 2,434 20 2,204 2,402 27 2188 15 2,385 February 3 2,168 22 2,330 10 2,086 29 2,323 17 1,954 August 2,317 24 1,877 12

Cornwell uses these forecasts for its production planning. It manufactures several types of glass, and demand is aggregated across products and measured in pounds.
It is obvious from the demands that there is a great deal of seasonality/cyclicality in the demand pattern. Cornwell will need to take this into account in developing a production plan for the coming year.
Cornwell must consider the costs of hiring or firing workers; using overtime; subcontracting; and holding inventory or running out of the product. The holding cost for glass is $.12 per pound per week. The company estimates that the cost of a late order is $20 per pound per week late.Cornwell currently costs out each hire at $5.63 per pound (based on training costs and production rates per worker). It costs out each fire at $15.73 per pound (based on unemployment compensation and loss of good will). The company currently has the capacity to manufacture 1,900 pounds of glass per week. This capacity cannot be exceeded under any plan. At most, 2,000 pounds can be subcontracted in a given week, and overtime is limited to 250 pounds per week. Glass that is manufactured during overtime costs $8 per pound more than glass manufactured during regular time. Glass that is subcontracted costs $2 more per pound than glass that is produced during overtime.
The current inventory is 73 units, and currently production is working at full capacity, 1,900 units. Cornwell has not been able to determine whether demands not met in the current month can be met later or whether these orders are lost.
DISCUSSION QUESTIONS
Find the production schedule Cornwell should follow under the various assumptions and policies, and detail the differences among these schedules.

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Related Book For  book-img-for-question

Introduction to Operations Research

ISBN: 978-1259162985

10th edition

Authors: Frederick S. Hillier, Gerald J. Lieberman

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