Question

Please follow the instructions for credit, thank you!!! #1 Skycell, a major European cell phone manufacturer,...

Please follow the instructions for credit, thank you!!!

#1 Skycell, a major European cell phone manufacturer, is making production plans for the coming year. Skycell has worked with its customers (the service providers) to come up with the forecasts of monthly requirements (in thousands of phones) as shown in the table.

Manufacturing is primarily an assembly operation, and capacity is governed by the number of people on the production line. The plant operates for 20 days a month, eight hours each day. One person can assemble a phone every 10 minutes. Workers are paid 20 euros per hour and a 50 percent premium for overtime. The plant currently employs 1,250 workers. Component costs for each cellphone total of 20 euros. Given the rapid decline in component and finished-product prices, carrying inventory from one month to the next incurs a cost of 3 euros per phone per month. Skycell currently has a no-layoff policy in place. Overtime is limited to a maximum of 20 hours per month per employee. Assume that Skycell has a starting inventory of 50,000 units and wants to end the year with the same level of inventory.

  1. Assuming no backlogs, no subcontracting, and no new hires, formulate the aggregate planning problem to minimize the total cost. (6 pts)
  2. Assume Skycell aims for a level production schedule, what changes you need to make in your formulation? (6 pts)
  3. Now Skecell has a team of 50 people who are willing to work as seasonal works. The cost of bringing them is 800 euros per employee and the layoff cost is 1,200 euros per employee. How do you change your formulation in part a? (6 pts)
  4. Solve part 1 in excel. Is there any value for management to negotiate an increase of allowed overtime per employee per month from 20 hours to 40 hours? (6 pts)
  5. Solve part 2 in excel. (3 pts)

    6. Solve part 3 in excel. (3 pts

    Month

    Demand

    Jan.

    1000

    Feb.

    1100

    March

    1000

    April

    1200

    May

    1500

    June

    1600

    July

    1600

    Aug.

    900

    Sep.

    1100

    Oct.

    800

    Nov.

    1400

    Dec.

    1700

Homework Answers

Answer #1

I have use excel solver to solve the above problem. Please note that I have not used cost of component ($20/unit) because it is a fix cost. ($20*unit produced)

Please find screenshots below

Excel formulation

Solver Parameters

Ans (a)

Ans (b)

Change hours in cell K12 from 20 to 40, this will get 300 ('000 unit) capacity. Set cells P21:P32 to 300 and solve.

Ans (6)

Change cell C14 to $6, and O21:O32 to 1000 ('000 units)

As you can see cost increases than previous solution

Due to time limit I am not able to answer remaining quetion but all can be answered using this model.

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