MMA 861 FEBRUARY 2020 Individual Assignment 1: Optimization Modeling If you have any questions regarding this assignment, please feel free to contact Eric Zhang (ericzh2020@gmail.com), the teaching assistant for this course. Feel free to cc me in your email. For Problems 1-3 below, submit a non-technical consulting report (approximately 1/2 a page for each problem) accompanied by a technical appendix to the portal dropbox. The report should highlight your findings (e.g. business implications) and be written in language that could be easily understood by an audience with little knowledge of quantitative models. The technical appendix should include the formulation of the model, as laid out in class (decisions, objective, constraints), and the screenshots of both the numerical values, as well as the formulae (accessed by pressing Ctrl + ~) for your model in Excel, and your actual Excel file Please note that this assignment is due by 8:30 am, March 7th and 8th 2020, for sections 1 and 2, respectively. LP modeling - RTT revisited Red Tomato Tools (RTT) is a small manufacturer of gardening equipment. RTT's operations consist of the assembly of purchased parts into a multipurpose gardening tool. Due to minimal equipment and space requirements for their assembly operations, RTT's capacity is determined mainly by the size of its workforce. The demand from RTT's gardening tools is highly seasonal, peaking in the spring as people plant their gardens. This seasonal demand ripples up the supply chain from the retailer to RTT, the manufacturer. RTT has decided to use aggregate planning to overcome the obstacle of seasonal demand and maximize profits. The options RTT has for handling seasonality are adding workers during peak season, subcontracting out some of the work, building up inventory during the slow months, or building up backlog orders that will be delivered late to the customers. To determine how best to use these options through an aggregate plan, RTT's VP of supply chain starts the first task - building a demand forecast. This forecast is built in collaboration with its retailers. Table 1 shows the cost and production data for RTT. Item Cost Material cost unit $10 Inventory holding cost/unit month $2 Marginal cost of stock-out unit month $5 Hiring and training cost worker $300 Layoff cost/worker $500 Labor hours required unit 4 hours Regular time cost/hour $ 4 Overtime cost hour $6 Marginal subcontracting cost/unit $30 Table 1: Cost and production data for Red Tomato Tools. Source: Chopra Sunil and Peter Meindl, Supply Chain Management: Strategy, Planning, and Operation Page 1 of 2