college press publishes textbooks for the college market. The demand for college
ID: 405602 • Letter: C
Question
college press publishes textbooks for the college market. The demand for college textbooks is high during the beginning of each semester and then tapers off during the semester. The unavailability of books can cayse a professor to switch apoptions, but the cost of storing books and their rapid obsolescence must also be considered. Given the demand and cost factors here, use the transportation method to design an aggregate production plan for College Press that will economically meet demand. What is the cost of the production plan. Formulate. Then solve using the add in solver with Excel.
Months Demand Forecast
February-April 5,000
May-July 10,000
August-October 30,000
November-January 25,000
Regular capacity per quarter 10,000 books
Overtime capacity per quarter 5,000 books
Subcontracting capacity per quarter 10,000 books
Regular production rate $20 per book
Overtime wage rate $30 per book
Subcontracting cost $35 per book
Holding Cost $2.00 per book
Explanation / Answer
cost = $1,800,000
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