Skycon, Inc.
4006 Avenue R 1/2
Galveston, Texas 77881
August 14, 1999
Re: Problem 5.63
Dr. Lee L. Lowery, Jr.
Department of Civil Engineering
Texas A&M University
College Station, Texas 77843
Dear Dr. Lowery:
Regarding our recent conversation, we would greatly appreciate your assistance in optimizing our forthcoming production run of satellite dishes. Because of the cyclic nature of sales, we usually crank up dish operations in July and quit in December with no inventory left over. We have firm commitments for the following number of sales, and can get enough material to make the maximum number of units shown:
|
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
|
|
Anticipated Sales |
30 |
20 |
50 |
40 |
20 |
50 |
|
Maximum Available Material |
40 |
50 |
20 |
50 |
30 |
30 |
We presently pay our workers $10/hour with 20% additional if they work overtime. You may assume that a worker works 170 hours a month regular time. They will be getting a 10% raise (both regular and overtime) effective November 1st. It takes us 100 hours to make a dish. I presently have 20 people who can be put on the satellite line. Ten of these will have to be left making dishes once we get started since they really cannot do anything else. They must be paid even if we are not making dishes during that month. The other 10 can be shifted in and out if you wish, and will be paid by other accounts unless you are using them (only charged to the satellite account if you use them.)
We have a storage shed where we can store up to 15 dishes. If you find it necessary, we will enlarge this capacity, but you will have to tell us how big to make it. It costs us $50 per dish per month to store a dish. Please note that we are a relatively small company, and can only afford to purchase materials for use in actually making dishes, and thus cannot carry material over from month to month.
I greatly appreciate your assistance on this matter, since we have no idea what to do. We normally just make them as we need them, realizing that we probably should have made them earlier, maybe, and stored them, maybe, maybe not. The possibilities just seem endless.
Very truly yours,