Homework SourseProblem 17 Sawyer Furniture is one of the few remaining dome
Problem 17.
Sawyer Furniture is one of the few remaining domestic manufacturers of wood furniture. In the current competitive environment, cost containment is the key to its continued survival. Demand for furniture follows a seasonal demand pattern with increased sales in the summer and fall months, culminating with peak demand in November.
The cost of production is $16 per unit for regular production, $24 for overtime, and $33 for subcontracting. Hiring and firing costs are $500 per worker. Inventory holding costs are $20 per unit per month. There is no beginning inventory. Ten workers are currently employed. Each worker can produce 50 pieces of furniture per month. Overtime cannot exceed regular production. Given the following demand data, use Excel Solver to design an aggregate production plan for Sawyer Furniture that will meet demand at the lowest possible cost.
Input:
Beg. Wkrs
10
Regular
$16
Hiring
$500
Units/wkr
50
Overtime
$24
Firing
$500
Beg. Inv.
0
Subk
$33
Inventory
$20
Month
Demand
Reg
OT
Subk
Inv
#Wkrs
#Hired
#Fired
Jan
500
500
0
0
0
10
0
0
Feb
500
500
0
0
0
10
0
0
Mar
1000
1,000
0
0
0
20
10
0
Apr
1200
1,000
200
0
0
20
0
0
May
2000
1,000
1,000
0
0
20
0
0
Jun
400
400
0
0
0
8
0
12
Jul
400
400
0
0
0
8
0
0
Aug
1000
1,000
0
0
0
20
12
0
Sep
1000
1,000
0
0
0
20
0
0
Oct
1500
1,500
0
0
0
30
10
0
Nov
7000
3,500
3,500
0
0
70
40
0
Dec
500
500
0
0
0
10
0
60
Total
17,000
12,300
4,700
0
0
246
72
72
| Input: | Beg. Wkrs | 10 | Regular | $16 | Hiring | $500 | |||
| Units/wkr | 50 | Overtime | $24 | Firing | $500 | ||||
| Beg. Inv. | 0 | Subk | $33 | Inventory | $20 | ||||
| Month | Demand | Reg | OT | Subk | Inv | #Wkrs | #Hired | #Fired | |
| Jan | 500 | 500 | 0 | 0 | 0 | 10 | 0 | 0 | |
| Feb | 500 | 500 | 0 | 0 | 0 | 10 | 0 | 0 | |
| Mar | 1000 | 1,000 | 0 | 0 | 0 | 20 | 10 | 0 | |
| Apr | 1200 | 1,000 | 200 | 0 | 0 | 20 | 0 | 0 | |
| May | 2000 | 1,000 | 1,000 | 0 | 0 | 20 | 0 | 0 | |
| Jun | 400 | 400 | 0 | 0 | 0 | 8 | 0 | 12 | |
| Jul | 400 | 400 | 0 | 0 | 0 | 8 | 0 | 0 | |
| Aug | 1000 | 1,000 | 0 | 0 | 0 | 20 | 12 | 0 | |
| Sep | 1000 | 1,000 | 0 | 0 | 0 | 20 | 0 | 0 | |
| Oct | 1500 | 1,500 | 0 | 0 | 0 | 30 | 10 | 0 | |
| Nov | 7000 | 3,500 | 3,500 | 0 | 0 | 70 | 40 | 0 | |
| Dec | 500 | 500 | 0 | 0 | 0 | 10 | 0 | 60 | |
| Total | 17,000 | 12,300 | 4,700 | 0 | 0 | 246 | 72 | 72 |
Solution
The questionhas asked for excel solver so let me try to put the relevant excel sheets. Not able to get the solver sheet. Any how let us work out the total cost as per the given data.
In order to meet the demands from Jan to Dec months, the given table shows number of workers varies from 10 to 70 with the total figure of hiring and firing as 72 for the period under consideration. The figures for subcontracting and inventory are all zeros so cost of subcontracting and carrying inventory are zero.
Out of total demand of 17,000 units Regular production contributed 12,300 and the balance 4,700 is from overtime production, therefore the relevant costs are as follows:
Cost of Hiring = 72 * 500 = 3600
Cost of Firing = 72 * 500 = 3600
Cost of Regular production = 12,300 * 16 = 196,800
Cost of Overtime production = 4,700 * 24 = 112,800
Total Cost = 316,800 (3600+3600+196800+112800+0+0) Zero zero for subcontracting and inventory carrying.
