*5. BagBoy makes a popular model pull cart for golfers. The company wants to determine the upcoming 6-month production schedule for this product. Past records indicate that up to 2400 pull carts can be produced in regular time each month; and up to 200 additional carts may be produced in any month during overtime. Because of the difference in labor cost pull carts of this model that are produced in regular time cost Bagboy $30 to make, while those produced in overtime cost the company $46. Forecasted demands for the next six months are shown in the table below. Month 1 Forecast Demand 1500 2 1800 Month Forecast Demand 3 2000 4 2500 5 3000 6 2800 Holding a pull cart in inventory costs $3 per cart per month and there are no pull carts in inventory at the start of the period. The storage capacity of the company's warehouse limits them to holding at most 400 pull carts in inventory at the end of any given month, and the manager wishes to have no inventory carried over at the end of the six month period. How many units should be produced in regular time each month, produced in overtime each month and held in inventory at the end of each month to meet the forecast demands and minimize the total production and inventory costs? FORMULATE this problem and then SOLVE it using Excel. Be sure to INTERPRET the solution by describing the optimal 6-month production and inventory plan. Solve the problem using Excel. (Use it to answer each question below.) (a) Interpret the solution. (b) What is the shadow price (labeled in appropriate units) for each additional unit of Month 3 demand at Bagboy? (c) What is the Range of Optimality (labeled in appropriate units) for the cost to produce each pull cart in Regular Time during Month 5?
*5. BagBoy makes a popular model pull cart for golfers. The company wants to determine the upcoming 6-month production schedule for this product. Past records indicate that up to 2400 pull carts can be produced in regular time each month; and up to 200 additional carts may be produced in any month during overtime. Because of the difference in labor cost pull carts of this model that are produced in regular time cost Bagboy $30 to make, while those produced in overtime cost the company $46. Forecasted demands for the next six months are shown in the table below. Month 1 Forecast Demand 1500 2 1800 Month Forecast Demand 3 2000 4 2500 5 3000 6 2800 Holding a pull cart in inventory costs $3 per cart per month and there are no pull carts in inventory at the start of the period. The storage capacity of the company's warehouse limits them to holding at most 400 pull carts in inventory at the end of any given month, and the manager wishes to have no inventory carried over at the end of the six month period. How many units should be produced in regular time each month, produced in overtime each month and held in inventory at the end of each month to meet the forecast demands and minimize the total production and inventory costs? FORMULATE this problem and then SOLVE it using Excel. Be sure to INTERPRET the solution by describing the optimal 6-month production and inventory plan. Solve the problem using Excel. (Use it to answer each question below.) (a) Interpret the solution. (b) What is the shadow price (labeled in appropriate units) for each additional unit of Month 3 demand at Bagboy? (c) What is the Range of Optimality (labeled in appropriate units) for the cost to produce each pull cart in Regular Time during Month 5?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:*5. BagBoy makes a popular model pull cart for golfers. The company wants to determine the
upcoming 6-month production schedule for this product. Past records indicate that up to 2400
pull carts can be produced in regular time each month; and up to 200 additional carts may be
produced in any month during overtime. Because of the difference in labor cost pull carts of
this model that are produced in regular time cost Bagboy $30 to make, while those produced in
overtime cost the company $46. Forecasted demands for the next six months are shown in
the table below.
Month
1
Forecast Demand
1500
2
1800
Month
Forecast Demand
3
2000
4
2500
5
3000
6
2800
Holding a pull cart in inventory costs $3 per cart per month and there are no pull carts in
inventory at the start of the period. The storage capacity of the company's warehouse limits
them to holding at most 400 pull carts in inventory at the end of any given month, and the
manager wishes to have no inventory carried over at the end of the six month period. How
many units should be produced in regular time each month, produced in overtime each month
and held in inventory at the end of each month to meet the forecast demands and minimize the
total production and inventory costs?
FORMULATE this problem and then SOLVE it using Excel. Be sure to INTERPRET the
solution by describing the optimal 6-month production and inventory plan.
Solve the problem using Excel. (Use it to answer each question below.)
(a) Interpret the solution.
(b) What is the shadow price (labeled in appropriate units) for each additional unit of Month
3 demand at Bagboy?
(c) What is the Range of Optimality (labeled in appropriate units) for the cost to produce
each pull cart in Regular Time during Month 5?
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