Problem # 5 George, the Room Service Supervisor at the London Inn, just received the forecast...

Problem # 5

George, the Room Service Supervisor at the London Inn, just received the forecast for the weekend orders. Based on this forecast, he has to decide whether the regular hours of his staff will be sufficient, if he needs to prepare them to do some overtime (maximum 20% of the forecasted demand) or, as a last resort, if he needs to hire temporary workers (subcontracting) to be able to deliver all orders.

The associated costs are:

Regular-time cost per order	$5.00
Overtime cost per order	$7.50
Subcontract cost per order	$10.00
Idle time cost per order	$15.00

Forecasted requirements are:

Room Service Orders		Capacity
Period	Forecast	Regular	Overtime	Subcontract
Saturday AM	50	75	25	100
Saturday PM	130	100	30	100
Sunday AM	150	75	25	100
Sunday PM	100	75	25	100

Constraints on overtime are:

Period	Overtime Max (20% of the forecasted demand)
Saturday AM	10
Saturday PM	26
Sunday AM	30
Sunday PM	20

Develop a schedule plan that minimizes costs using the transportation method. Due to the nature of the business, there's no inventory, no stock out and no back order. On the other hand, if the regular staff capacity for the period is larger than the demand, there will be a cost for idle time.

State the corresponding schedule plan and its total costs?

Expert Solution

orchestra answered 1 year ago

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