1. Consider the following data

year 1	Demand (Thousands of packages)
1	300
2	120
3	200
4	135

Assume that the company has three workers on the payroll. The owner of the company estimates that he will have 20,000 packages on hand at the end of the current year. Assume that, on average, each worker is paid $ 25,000 per year and is responsible for producing 30,000 packages, inventory cost have been estimated to be 4 cents per package per year and shortages are not allowed.

Based on the effort of interviewing and training new workers. The owner estimates that it cost $500 for each worker hired. The firing cost is $1,000

1. Required
2. a. Determine a minimum inventory production plan (Chase strategy)
3. b. Determine the total cost for part a
4. c. Determine the level production plan that meets demand but does not hire or fire workers during the 4-year period.
5. d. Determine the total cost for part c
6. e. Construct the LP model for the problem and determine the optimal solution using LINDO

Answer rating: 100% (QA)

a The Chase strategy aims to adjust production to meet the demand while keeping the inventory level as low as possible To determine the minimum invent... View the full answer