You’ve recently been hired as an analyst for ToolPro, which manufactures four products: lawnmowers, leaf blowers, snow blowers, and generators. Your first assignment is to recommend a production plan for the coming six months. Your supervisor has provided you with sales forecasts for each product for the next six months, and has asked you to use the forecast to generate a 6-month production plan, by month, that maximizes the company’s profit and meets all forecasted requirements.

 

You can hire new employees, use overtime, or level production throughout the year by overproducing in advance of demand and holding inventory (or a combination of some or all of these options). Hiring new employees comes at a one-time cost of $3,000. Overtime is paid at time-and-a-half (i.e., 150% of the normal labor rate for each category). Leveling production (i.e., spreading the annual production evenly over the year) will likely reduce the need for overtime and new hires, but increases inventory holding costs in months where production is greater than demand for that month.  Assume inventory holding cost is only applied to excess inventory at the end of each month (i.e. inventory that remains AFTER demand has been met).

 

Transcribed Image Text:

Lawnmower Leafblower Snowblower Generator Total Sales Jan-20 1473 224 3009 393 5099 Feb-20 2048 252 2198 308 4806 Mar-20 2483 312 1851 138 4784 Apr-20 3649 339 163 33 4184 May-20 4183 407 125 135 4850 Jun-20 3497 450 37 72 4056 Lawnmower Leafblower Snowblower Generator Total Sales Jan-20 1473 224 3009 393 5099 Feb-20 2048 252 2198 308 4806 Mar-20 2483 312 1851 138 4784 Apr-20 3649 339 163 33 4184 May-20 4183 407 125 135 4850 Jun-20 3497 450 37 72 4056

Answer rating: 100% (QA)

rators 25 20 05 05 The labor rate for each of the four categories is as follows Assembly 20hour Test... View the full answer