Question: Your boss needs your help in figuring out the constraints so that she can complete an aggregate plan using linear programming. She sells the product
Your boss needs your help in figuring out the constraints so that she can complete an aggregate plan using linear programming. She sells the product for $50 per unit. She wants to minimize costs. She is forecasting demand for next year as:
| Jan | 1500 |
| Feb | 1700 |
| Mar | 1900 |
| Apr | 2100 |
| May | 2300 |
| Jun | 2500 |
| Jul | 2700 |
| Aug | 3100 |
| Sep | 2600 |
| Oct | 2300 |
| Nov | 1900 |
| Dec | 1700 |
Her costs are:
| Materials (per unit) | $28 |
| Inventory holding (per unit per month) | $6 |
| The marginal cost of stockout (per unit per month) | $5 |
| Hiring & training (per worker) | $150 |
| Layoff (per worker) | $300 |
| Regular time (per hour) | $15 |
| Overtime (per hour) | $22 |
| Subcontracting (per unit) | $30 |
Your boss knows this information about labor:
| Beginning workforce | 65 |
| Working days in a month | 20 |
| Worker productive time (hours per day) | 7 |
| Maximum over time (hours) | 15 |
| Labor hours required (per unit) | 4 |
Finally, here is what your boss wants for inventory management:
| Beginning | 1500 |
| Ending | 500 |
| Stockout at the end of June | 0 |
What is the worker pay per month (per worker)? And what does each worker produce per month?
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