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HIMANSHU TIWARI (Querist)
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29 December 2008 The washdry company manufactures several models of washers and dryers. The projected requirements over the next year for their automatic washers are:-

Month demand
1 800
2 1030
3 810
4 900
5 950
6 1340
7 1100
8 1210
9 600
10 580
11 890
12 1000

Current inventory is 100 units. The firms current capacity is 960 units per month. The average salary of production workers is $ 1200 per month. Each production worker accounts for 30 units per month. Overtime is paid at one and a half upto 20 % additional time. Additional labour can be hired for a training cost of $ 250, and existing workers can be laid off at a cost of $ 500. Any increase or decrease in production rate costs $ 5000 for tooling, set up and line charges. This does not apply, however to overtime. Inventory holding costs are $ 25 per unit per month. Back order cost $ 75 per unit short.

Determine two different production plans trying to minimise the cost of meeting next years requirements for:

1. Varying work force to meet demand.
2. Keeping work force constant.

HIMANSHU TIWARI

HIMANSHU TIWARI (Querist)
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29 December 2008

HIMANSHU TIWARI

HIMANSHU TIWARI (Querist)
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30 December 2008