Decorum, Inc., manufactures high-end ceiling fans. Their sales are seasonal with higher demand in the warmer summer months. Typically, sales average 400 units per month. However, in the hot summer months (June, July, and August), sales spike up to 600 units per month. Decorum can produce up to 500 units per month at a cost of $300 each. By bringing in temporary workers, Decorum can produce up to an additional 75 units at a cost of $350 each. Decorum sells the ceiling fans for $500 each. Decorum can carry inventory from one month to the next, but at a cost of $20 per ceiling fan per month. Decorum has 25 units in inventory at the start of January. Assuming Decorum must produce enough ceiling fans to meet demand, how many ceiling fans should Decorum produce each month (using their regular labor force and/or temporary workers) over the course of the next year so as to maximize their total profit?
a. Visualize where you want to finish. What numbers will Decorum require? What are the decisions that need to be made? What should the objective be?
b. Suppose Decorum builds 450 ceiling fans in January and 550 (utilizing temporary workers) in February. Calculate by hand the total costs for January and February.
c. Make a rough sketch of a spreadsheet model, with blocks laid out for the data cells, changing cells, output cells, and objective cell.
d. Build a spreadsheet model for January and February and thoroughly test the model.
e. Build and solve a linear programming spreadsheet model to maximize the profit over all 12 months?
Enjoy 24/7 customer support for any queries or concerns you have.
Phone: +1 213 3772458
Email: support@gradeessays.com