Minimize the combined production and inventory holding cost

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Reference no: EM132302680

Suzie’s Sweatshirts is a home-based company that makes upscale, hand-painted sweatshirts for children. Forecasts of sales for the next year are

Autumn: 125

Winter: 350

Spring: 75

Each Shirt is sold for $15. The holding cost per shirt is 6% of the selling price per quarter. The shirts are painted by part-time workers who earn $4.50 per hour during the autumn. Because of the high demand for part-time help during the winter holiday season, labor rates are higher in the winter, and Suzie must pay the workers $6.00 per hour. In the spring, labor is more difficult to keep, and Suzie finds that she must pay $5.50 per hour to get qualified help. Each shirt takes 1.5 hours to complete. Formulate the problem to a LP model to help Suzie plan production over the three quarters to minimize the combined production and inventory holding cost. Suppose there is no inventory at the beginning of the autumn.

Reference no: EM132302680

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