Question 7.

D[2] Item On-Hand Inventory 40 50 B 100 D E 70 25 7. The Silver Star Bicycle Company will be manufacturing men's and women's models of its Easy Pedal 10-speed bicycle during the next two months. and the company would like a production schedule indicating how many bicycles of each model should be produced in each month. Current demand forecasts call for 150 men's and 125 women's models to be shipped during the first month, and 200 men's and 150 women's models to be shipped during the second month. Additional data are shown in Exhibit 13.18. Last month Silver Star used a total of 4,000 hours of labor. Its labor relations policy will not allow the combined total hours of labor (manufacturing plus assembly) to increase or decrease by more than 500 hours from month to month. In addition, the company charges monthly inventory at the rate of 2 percent of the production cost based on the inventory levels at the end of the month. Silver Star would like to have at least 25 units of each model in inventory at the end of the two months. (This question is best approached using the linear programming techniques described in Supplementary Chapter SC C.) a. Establish a production schedule that minimizes production and inventory costs and satisfies the labor-smoothing, demand, and inventory requirements. What inventories will be maintained, and what are the monthly labor requirements? b. If the company changed the constraints so that monthly labor increases and decreases could not exceed 250 hours, what would happen to the production schedule? How much would the cost increase? What would you recommend? 9. Consider the same bill of material and information in problem 8 but assume that two of component B are needed for each A, and that the gross requirement for A is 220 units. Compute the net requirements for each item assuming zero lead times. 10. Each bank teller workstation is forecasted to process 200 transactions (the end item) on Friday. The bank is open from 9:00a.m. to 7:00p.m. on Friday, with 90 minutes for lunch and breaks. Three teller windows are open on Friday. A work-study analysis reveals that the breakdown of the transaction mix is 40 percent deposits, 45 percent withdrawals, and 15 percent transfers between accounts. A different form is used for each type of transaction, so there is one deposit slip per deposit, one withdrawal slip per withdrawal, and two transfer slips per transfer. a. How many transfer slips are needed on Friday? b. How many withdrawal slips are needed on Friday? EXHIBIT 13.18 Silver Star Bicycle Data Labor Required for Model Production Costs Manufacturing (hours) Men's $40 10 Women's $30 8 Labor Required for Assembly (hours) 3 Current Inventory 20 N 30