a2_s06_331

# A2_s06_331 - University of Windsor Odette School of Business Operations Management I 73-331 Summer 2006 Assignment 2 Maximum Points 60 Due Thursday

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University of Windsor Odette School of Business Operations Management I 73-331 Summer 2006 Assignment 2 Maximum Points 60 Due: Thursday, July 20, in the beginning of the class. General note: Staple your assignment with a cover sheet that includes your name and student ID on the front page of the assignment. Show work. To get the maximum point, show all formula in an appropriate step-by-step procedure, substitution, intermediate results, final answers, conclusions and interpretations. Most marks are allocated to procedure, formula and substitution. So, the final answers do not complete the work. In some exceptional cases, if the same formula is used several times, you may avoid repetition by showing some sample formula and substitution. Show your results up to four decimal places. This is an individual assignment. You may discuss the problems with other students, but you must hand in your own work, in your own words. Late assignments may not be accepted. This assignment covers lessons 10-12, 14-17. 1. (10 points, lesson 10): Harold Gray owns a small farm in the Salinas Valley that grows apricots. The apricots are dried on the premises and sold to a number of large supermarket chains. Based on past experience and committed contracts, he estimates that sales over the next five years in thousands of packages will be as follows: Year Forecasted Demand (thousands of packages) 1 500 2 400 3 600 4 400 5 550 Assume that (i) workers may be hired/fired in the beginning of a year (ii) each worker stays on job for at least one year and (iii) there are currently 6 workers on the payroll. Gray will have 100,000 packages on hand at the end of the current year. He would like to meet all the demand and have at least 50,000 packages of inventory at the end of the 5 th year. Assume that, on the average, each worker is paid \$50,000 per year and is responsible for producing 40,000 packages. Inventory costs have been estimated to be 10 cents per package per year. Based on the effort of interviewing and training new workers, Farmer Grey estimates that it costs \$500 for each worker hired. Severance pay amounts to \$1,000 per worker. Find a production plan that minimizes total cost. Formulate a linear programming problem and solve the problem using Excel solver. A

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## This note was uploaded on 09/30/2008 for the course MGMTSC 73-331 taught by Professor Baki during the Summer '08 term at Windsor.

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A2_s06_331 - University of Windsor Odette School of Business Operations Management I 73-331 Summer 2006 Assignment 2 Maximum Points 60 Due Thursday

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