54.

Consider the Pigskin example (Example 3.3) from chapter 3. Find Pigskin's optimal production policy if, in addition to the given production and holding costs, there is a fixed cost of $50,000 during any month in which there is positive production. Assume now that storage capacity is 20,000 footballs.

% Cut = General Normal Neutral AutoSum - A Be Copy Calibri - V11 VA BIU - - - A ab Wrap Text 3 Merge & Center - Bad Good E xplanatory... Input Normal 2 Conditional Format as Calculation Formatting Table- $ - %, Check Cell Linked Cell Insert Delete Format Paste Format Painter Clipboard Clear Sort & Find & Filter Select Editing Font Alignment Numbers Styles Cells A1 - X V for 'Multiperiod production B C D E F G H I J K L M N O P Q R S T U V W X Multiperiod production 3 Input data Initial inventory 5. Holding cost as % of prod cost 2 Month B Production cost/unit 0 Monthly cost for positive production 1 Production capacity each month 3 Production plan (all quantities are in 100s of footballs) 4 Month 5 Produce this month 6 7 Units produced 9 Production capacity 1 On hand after production 3 Demand 5 Ending inventory 7 Storage capacity 9 Summary of costs (all costs are in hundreds of dollars) O Month 1 Production costs 2 Holding costs 3 Fixed costs for positive production 4 Totals No