Solved Problem 2
The Arctic Air Company produces residential air conditioners. The manufacturing manager wants to develop a sales and operations plan for the next year based on the following demand and capacity data (in hundreds of product units):
Demand
Regular-time Capacity
Overtime Capacity
Subcontractor Capacity
Jan–Feb (1)
50
65
13
10
Mar–Apr (2)
60
65
13
10
May–Jun (3)
90
65
13
10
Jul–Aug (4)
120
80
16
10
Sep–Oct (5)
70
80
16
10
Nov–Dec (6)
40
65
13
10
Totals
430
420
84
60
Undertime is unpaid, and no cost is associated with unused overtime or subcontractor capacity. Producing one air conditioning unit on regular time costs $1,000, including $300 for labor. Producing a unit on overtime costs $1,150. ...
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