The Good and Rich Candy Company makes a variety of candies in three factories worldwide.Its line of chocolate candies exhibits a highly seasonal demand pattern with peaks during thewinter months (for the holiday season and Valentine's Day) and valleys during the summermonths (when chocolate tends to melt and customers are watching their weight). Given thefollowing costs and quarterly sales forecasts, determine whether a) level productionstrategy or b) chase production strategy would more economically meet the demand forchocolate. (Use Hiring Cost= $100 per worker, Firing Cost = $500, Inventory carrying cost =$0.50 per pound per quarter, Regular production cost per pound = $2.00, Production per employee = 1,000 pounds per quarter, Beginning Workforce = 100 workers).
Quarter: Forecast Sales (lb)
Spring 80,000
Summer 50,000
Fall 120,000
Winter 150,000
2. Formulate a linear programming model for the problem above that will satisfy demand forGood and Rich chocolate candies at minimum cost. Solve the model with Excel Solver.Compare the solution with Chase and Level strategies you obtained.
3. Build the Excel Spreadsheet for the Level Operating Plan with Constant Number ofEmployees example in Manufacturing Planning and Control for SCM (Jacobs et al.) on page132. Keep your excel macros and change the Sales Forecast data for each month in the planto the average of the data provided in the example. Compare total costs.