Problem 4-19 (Algorithmic) The Silver Star Bicycle Company will be manufacturing both men’s and women’s models of...

70.2K

Verified Solution

Question

Finance

Problem 4-19 (Algorithmic)
The Silver Star Bicycle Company will be manufacturing both men’sand women’s models of its Easy-Pedal 10-speed bicycles during thenext two months. Management wants to develop a production scheduleindicating how many bicycles of each model should be produced ineach month. Current demand forecasts call for 150 men’s and 125women’s models to be shipped during the first month and 220 men’sand 170 women’s models to be shipped during the second month.Additional data are shown:
Production Labor Requirements (hours) Current
Model Costs Manufacturing Assembly Inventory
Men's $120 2.2 1.3 20
Women's $90 1.5 1.1 30
Last month the company used a total of 1000 hours of labor. Thecompany’s labor relations policy will not allow the combined totalhours of labor (manufacturing plus assembly) to increase ordecrease by more than 100 hours from month to month. In addition,the company charges monthly inventory at the rate of 2% of theproduction cost based on the inventory levels at the end of themonth. The company would like to have at least 25 units of eachmodel in inventory at the end of the two months.
Establish a production schedule that minimizes production andinventory costs and satisfies the labor-smoothing, demand, andinventory requirements. What inventories will be maintained, andwhat are the monthly labor requirements? If required, round youranswers to the nearest whole number.

Production schedule:

The optimal solution is to produce  of the men's model inmonth 1,  of the men's model in month 2,  unitsof the women's model in month 1, and of the women's model in month2.

Total Cost = $
Inventory Schedule
Month 1 Men's Women's
Month 2 Men's Women's
Labor Levels
Previous month hours
Month 1 hours
Month 2 hours
If the company changed the constraints so that monthly laborincreases and decreases could not exceed 50 hours, what wouldhappen to the production schedule? If required, round your answersto the nearest whole number.

Production schedule:

The optimal solution is to produce  of the men's model inmonth 1,  of the men's model in month 2,  unitsof the women's model in month 1, and of the women's model in month2.

Total Cost = $

How much will the cost increase?

$ ___________

Inventory Schedule
Month 1	Men's	Women's
Month 2	Men's	Women's

Labor Levels
Previous month	hours
Month 1	hours
Month 2	hours

Answer & Explanation Solved by verified expert

3.7 Ratings (301 Votes)

Decision variables x11 number of mens model produced in month 1 x21 number of womens model produced in month 1 x12 number of mens model produced in month 2 x22 number of womens model produced in month 2 y11 inventory of mens model at the end of month 1 y12 inventory of womens model at the end of month 1 y12 inventory of mens model at the end of month 2 y22 inventory of womens model at the end of month 2 Labour hours per unit of mens model See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Problem 4-19 (Algorithmic)The Silver Star Bicycle Company will be manufacturing both men’sand women’s models of its Easy-Pedal 10-speed bicycles during thenext two months. Management wants to develop a production scheduleindicating how many bicycles of each model should be produced ineach month. Current demand forecasts call for 150 men’s and 125women’s models to be shipped during the first month and 220 men’sand 170 women’s models to be shipped during the second month.Additional data are shown:ProductionLabor Requirements (hours)CurrentModelCostsManufacturingAssemblyInventoryMen's$1202.21.320Women's$901.51.130Last month the company used a total of 1000 hours of labor. Thecompany’s labor relations policy will not allow the combined totalhours of labor (manufacturing plus assembly) to increase ordecrease by more than 100 hours from month to month. In addition,the company charges monthly inventory at the rate of 2% of theproduction cost based on the inventory levels at the end of themonth. The company would like to have at least 25 units of eachmodel in inventory at the end of the two months.Establish a production schedule that minimizes production andinventory costs and satisfies the labor-smoothing, demand, andinventory requirements. What inventories will be maintained, andwhat are the monthly labor requirements? If required, round youranswers to the nearest whole number.Production schedule:The optimal solution is to produce of the men's model inmonth 1, of the men's model in month 2, unitsof the women's model in month 1, and of the women's model in month2.Total Cost = $ Inventory ScheduleMonth 1Men'sWomen'sMonth 2Men'sWomen'sLabor LevelsPrevious monthhoursMonth 1hoursMonth 2hoursIf the company changed the constraints so that monthly laborincreases and decreases could not exceed 50 hours, what wouldhappen to the production schedule? If required, round your answersto the nearest whole number.Production schedule:The optimal solution is to produce of the men's model inmonth 1, of the men's model in month 2, unitsof the women's model in month 1, and of the women's model in month2.Total Cost = $ How much will the cost increase?$ ___________

	Production	Labor Requirements (hours)		Current
Model	Costs	Manufacturing	Assembly	Inventory
Men's	$120	2.2	1.3	20
Women's	$90	1.5	1.1	30