Use the table below to answer the following question(s). Letherin Hides is a company that makes boots specifically targ
Posted: Fri May 20, 2022 6:50 am
Use the table below to answer the following question(s).
Letherin Hides is a company that makes boots specifically targeting
college students. Forecasts of sales for the next year are 200 in
the summer, 550 in the autumn, and 500 in the winter. Accessories
that are used on the boots are purchased from a supplier for
$31.66. The cost of capital is estimated to be 24% per year (or 6%
per quarter); thus, the holding cost per item is 0.06($31.66) =
$1.9 per quarter (rounded figure). Letherin Hides hires freelance
art designers at part-time to craft designs during the summer, and
they earn $6 per hour. In the autumn, labor is more difficult to
keep, and the owner must pay $6.5 per hour to retain qualified
help. Because of the high demand for part-time help during the
winter holiday season, labor rates are higher in the winter, and
workers earn $7.75 per hour. Each boot design takes 2 hours to
complete. How should production be planned over the three quarters
to minimize the combined production and inventory holding
costs?
The table below provides information on Letherin Hides boot design
cost and production.
Use a linear optimization model based on the data to answer the
following questions.
According to the linear optimization model, what is the total cost
incurred by Letherin Hides for the combined seasons?
$15,605
$18,700
$15,700
$17,000
Letherin Hides is a company that makes boots specifically targeting
college students. Forecasts of sales for the next year are 200 in
the summer, 550 in the autumn, and 500 in the winter. Accessories
that are used on the boots are purchased from a supplier for
$31.66. The cost of capital is estimated to be 24% per year (or 6%
per quarter); thus, the holding cost per item is 0.06($31.66) =
$1.9 per quarter (rounded figure). Letherin Hides hires freelance
art designers at part-time to craft designs during the summer, and
they earn $6 per hour. In the autumn, labor is more difficult to
keep, and the owner must pay $6.5 per hour to retain qualified
help. Because of the high demand for part-time help during the
winter holiday season, labor rates are higher in the winter, and
workers earn $7.75 per hour. Each boot design takes 2 hours to
complete. How should production be planned over the three quarters
to minimize the combined production and inventory holding
costs?
The table below provides information on Letherin Hides boot design
cost and production.
Use a linear optimization model based on the data to answer the
following questions.
According to the linear optimization model, what is the total cost
incurred by Letherin Hides for the combined seasons?
$15,605
$18,700
$15,700
$17,000