Mr. Meadows Cookie Company: Total cost of the constant workforce plan

Production and Operation Analysis - 4th edition - Steven Nahmias - Question 36 - Chapter 3

The Mr. Meadows Cookie Company can obtain accurate forecasts for 12 months based on firm orders.  These forecasts and the number of workdays per month are:

Month      Demand Forecast           Workdays
          (in K's of cookies)
1            850                       26
2            1260                      24
3            510                       20
4            980                       18
5            770                       22
6            850                       23
7            1050                      14
8            1550                      21
9            1350                      23
10           1000                      24
11           970                       21
12           680                       13

During a 46-day period when there were 120 workers, the firm produced 1,700,000 cookies.  Assume that there are 100 workers employed at the beginning of month 1 and zero starting in inventory.

a) find the minimum constant workforce needed to meet monthly demand
b) assume Ci=$0.10 per cookie per month, Ch=$100 and Cf=$200.  Add columns that give the cumulative on-hand inventory and inventory cost.  What is the total cost of the constant workforce plan?
c) Construct a plan that changes the level of the workforce to meet monthly demand as closely as possible.  In designing the logic for your calculations, be sure that inventory does not go negative in any month.  Determone the cost of this plan.

Attached file(s):

hw.xls  View File

data2557.xls  View File