Question

(PLEASE SHOW STEPS TO SOLUTIONS. I'M GETTING STUCK IN MY PROCESS AND NOT SURE WHERE I'M GOING WRONG AND WHAT TO DO NEXT.)

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 forecasts of monthly requirements (in thousands of phones) as shown in the table below (e.g., demand in Jan. is 1,000,000 units.)

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 12 minutes. Workers are paid 15 euros per hour and a 50 percent premium for overtime. The plant currently employs 1,250 workers. Component costs for each cell phone total 25 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 15 hours per month per employee. Assume that Skycell has a starting inventory of 60,000 units and wants to end the year with the same level of inventory. Assume no backlogs, no subcontracting, and no new hires.

Please construct an aggregate planning model. (Constructing an aggregate planning model means defining the decision variables and writing out the objective function and the constraints for the AP optimization problem.)

Monthly Demand for Cell Phones, in Thousands

Month	Demand
January	1,000
February	1,100
March	1,000
April	1,200
May	1,500
June	1,600
July	1,600
August	900
September	1,100
October	800
November	1,400
December	1,700

Answer 1

Thank you sir/Madam.