Reboot Inc. is a manufacture of hiking boots. The demand next year is expected to be 3,000, 4,000, 8,000, and 7,000 pair of boots in quarters 1, 2, 3, and 4 respectively. With its current production facility the company can produce at most 6,000 pairs of boots in any quarter. Each pair sold generates a profit of $20 per pair. Each pair at end of quarter incurs $8 in storage and capital recovery cost. Reboots has 1,000 pair of boots in inventory at the start of quarter 1. Reboot top management has given you the assignment of doing some spread sheets modeling to analyze what the product schedule should be the next four quarters and make a recommendation.
a. Visualize where you want to finish. What numbers will top management need what decision needs to be made? What should the objective be?
b. Suppose the reboot were produced 5,000 pairs of boots in each of the first two quarters. Calculate by hand the ending inventory, profit from sales, and inventory cost for quarters 1 and 2.
c. Make a rough sketch of a spreadsheet model, with blocks laid out for the data cells, changing cells, output cells, and objective cell.
d. builds a spreadsheet models for 1 and 2, and then thoroughly test model.
e. Expand the model to full scale and then solve it.