Comfort Plus Inc. (CPI) manufactures a standard dining chair used in restaurants. The demand forecasts for quarter 1 (January â€“ March) and quarter 2 (April â€“ June) are 3700 and 4200 chairs, respectively. CPI has a policy of satisfying demand in the quarter in which it occurs.
Save your time - order a paper!
Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlinesOrder Paper Now
The chair contains an upholstered seat that can be produced by CPI or purchased from DAP, a subcontractor. DAP currently charges $12.50 per seat, but has announced a new price of $13.75 effective April 1. CPI can produced 3800 seats per quarter at a cost of $10.25 per seat.
Seats that are produced or purchased in quarter 1 and used to satisfy demand in quarter 2 cost CPI $1.50 each to hold in inventory, but the maximum inventory cannot exceed 300 seats.
Formulate a linear program to help minimize cost while satisfying demand. Solve the LP using Solver or LINDO and generate the range sensitivity analysis as part of the output.