AE faces challenges in its factory and retail store. It has 38 employees. There are 3 categories: expert (E), experienced (P) and beginner (B). The number of employees in each category is given below.

Category	Number
Expert (E)	6
Experienced (P)	12
Beginner (B)	20

These three categories differ in their monthly productivity, and employees can team up to raise productivity. For example, an expert working alone can make 15 products per month, while an expert and an experienced employee working together (E+P) can produce 29 products per month. There are a total of seven possible team configurations, shown in Table 2.

Team	Productivity
E	15
P	12
B	6
E+P	29
E+B	23
P+B	19
E+P+B	34

Each team occupies a machine (an employee working individually is also considered a team). The company has 18 machines, three of which are old and can only be operated by one employee (of any category). All the employees are hired on salary and the company does not want to recruit or lay off any of them. Assume that labor is a sunk cost and can be ignored in this analysis. Finding a way to form teams for these 38 employees to maximize the factorys monthly productivity becomes AEs first key objective.

AE has two opportunities to improve its productivity. AE can choose to take one of the opportunities or neither, but not both.

First, a competitor proposes a process redesign that involves improving the workflow and factory layout. If AE takes this offer, the redesign can reduce the number of single-operator machines from 3 to 1. The cost for this offer is five products per month given to the competitor.

The second opportunity to improve productivity is a strategic alliance. If this strategic alliance is formed, there is a 50% chance that it will be successful. If it is successful, it will increase the productivity of (E+B) and (P+B). If it is unsuccessful, then the alliance will only increase the productivity of (E+B). Forming the strategic alliance does not change productivity of any other team configuration. The resulting productivity of these teams is given in Table 3. The cost of this opportunity is ten products per month given to the strategic ally. This cost is incurred regardless of the alliances success.

Team	Successful	Unsuccessful
E+B	25	25
P+B	21	19

AE also faces challenges in its store. First, AE produces at its maximum productivity in every month and uses the produced product to meet demand only in that month. For simplicity, assume that all the product will be produced and available for sale at the beginning of each month. Any unsold inventory in that month will be discarded so that inventory does not carry over to next month. For example, if AEs monthly productivity (as a result of the decision on team formation) is 100 units, then 100 units are available at the beginning of each month at its store to meet the demand in that month and any unsold inventory at the end of month will be discarded.

The net profit per unit is $10. Based on historical data, the number of customers per month is a normal distribution (=60, =20). The number of products purchased by each customer follows a triangular distribution with a minimum of zero, maximum of 30, and most likely purchase of 20 units.

When AE cannot satisfy a customers demand, there is a 60% chance that the customer will file a complaint. In that case, AE will pay the customer a penalty (i.e., store credit or coupon) of $5 per unsatisfied demand. For example, suppose a customer demands 10 units and AE has only 4 units of inventory available, then this customer has 6 units of unsatisfied demand. In this case AE will earn $10*4=$40 from this customer. If the customer files a complaint (60% likely), then AE will incur a penalty cost of $5*6=$30 for this customer, meaning that AEs revenue from this customer will be $40-$30=$10.

AEs sale of the portable is on the rise. It faces an average demand of 60 customers per month. A recent market research finds that its average number of customers per month will increase over time, as shown in Table 4. Assume that Year 1 is the current year and that all other parameters remain constant.

Year:	1	2	3	4	5
Customers per month ():	60	75	90	105	120
Standard deviation ():	20	20	20	20	20

Once optimized, the maximum productivity is fixed for the next five years. Since maximum productivity is fixed while store demand is projected to increase, AE anticipates paying more penalties due to unsatisfied demand each year.

QUESTIONS: What is the most productive way to organize the employees in the factory? What is your recommendation on which, if any opportunity to take? Then, include the projection of future losses.

*Please answer the questions. Or, walk me through the steps on how to do it in detail please!