Period No.

Hired
Material cost
Month Demand ($/unit) 10 0 0

Inventory
holding cost
($/unit/month
January 1600 ) 2 1 0

Marginal cost
of stockout
($/unit/month
February 3000 ) 5 2 0

Hiring and
training cost
March 3200 ($/worker) 300 3 0
Layoff cost
April 3800 ($/worker) 500 4 0

Labor hours
required
May 2200 (/unit) 4 5 0
Regular time
June 2200 cost ($/hour) 4 6 0
Overtime cost
($/hour) 6

Cost of
subcontracting
($/hour) 30 Total cost 422660
No. Laid Workforce
off size Overtime Inventory Stockout Subcontract Total production Demand Price

0 80 0 1000 0 0

16 64 0 1960 0 0 2560 1600 40

0 64 0 1520 0 0 2560 3000 40

0 64 0 880 0 0 2560 3200 40

0 64 0 0 220 140 2560 3800 40

0 64 0 140 0 0 2560 2200 40

0 64 0 500 0 0 2560 2200 40

Total revenue 640000

Profit 217340
Constraints

WorkforceCapacity Inventory Overtime

-3.55E-14 0 0 640

0 0 0 640

0 0 0 640

0 0 0 640

0 0 0 640

0 0 0 640
1000
3000
3800
4800
2000
1400 H 50
L 50
Promotion

January April
Demand-Jan 1.1Current+.2next+.2nexttonext 1.1Current+.2next+.2nexttonext
Demand-next two0.8current 0.8current

422080 438920
643400 650140
221320 211220