Question

The Baily Corporation has developed a specialized software program that improves inventory control capability. The following table/information provides the necessary data to evaluate: Quarter Forecast (units) Regular Time Overtime Sub-Contract 1 500 400 80 100 2 750 400 80 100 3 900 800 160 100 4 450 400 80 100 Initial Inventory = 200 units Regular Time Cost = $2.50/unit Overtime Cost = $1.00/extra per unit Subcontracting Cost = $4.00/unit Carrying Cost = $.50/unit Back-Order Cost = $.75/unit The company decides that the initial inventory of 200 units will incur the 50¢/unit cost from each prior quarter. a. Find the optimal plan using the transportation method. [ Select ] b. What is the total cost of the plan? [ Select ] c. Does any overtime time capacity go unused? [ Select ] If so/not, how much in which periods or not? [ Select ] d. What is the extent of back-ordering in units and dollars? [ Select ]

please answer all the questions with the right answers, thanks

Answer 1

(a)

The following table shows consumption in a quarter as shown in column from production as shown in row

	Consumption in quarter
Production	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Unused	Supply
Initial Inventory	0.5	1	1.5	2	0	200
Qtr 1 Regular	2.5	3	3.5	4	0	400
Qtr 1 Overtime	3.5	4	4.5	5	0	80
Qtr 1 Subcontract	4	4.5	5	5.5	0	100
Qtr 2 Regular	3.25	2.5	3	3.5	0	400
Qtr 2 Overtime	4.25	3.5	4	4.5	0	80
Qtr 2 Subcontract	4.75	4	4.5	5	0	100
Qtr 3 Regular	4	3.25	2.5	3	0	800
Qtr 3 Overtime	5	4.25	3.5	4	0	160
Qtr 3 Subcontract	5.5	4.75	4	4.5	0	100
Qtr 4 Regular	4.75	4	3.25	2.5	0	400
Qtr 4 Overtime	5.75	5	4.25	3.5	0	80
Qtr 4 Subcontract	6.25	5.5	4.75	4	0	100
Forecast	500	750	900	450	400	-

Create Excel model as follows:

Enter Solver Parameters as follows:

Click Solve to generate the solution.

After that, values appear automatically in yellow cells

Click OK

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(b)

Total cost of the plan = $ 6635

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(c)

Yes, a total of 90 units of overtime capacity go unused.

60 units in Qtr 3 and 30 units in Qtr 4

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(d)

There is no back-ordering

So, extent of back-ordering in units and dollars is 0