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Each year, a shoe manufacturing company faces demands (which must be met on time) for pairs of shoes: quarter 1, 4000; quarter 2, 7000; quarter 3, 8000; quarter 4, 3000. Employees work three consecutive quarters and then receive one quarter off. For example, a worker might work during quarters 3 and 4 of one year and quarter 1 of the next year. During a quarter in which an employee works, he or she can produce up to 600 pairs of shoes. Each worker is paid $6000 per quarter. At the end of each quarter, a holding cost of $10 per pair of shoes in incurred. Assume that at the end of each year, the ending inventory is 0.
a) Formulate a linear program to help company management determine how to minimize the cost per year (labor plus holding) of meeting the demand for shoes.
b) Construct an Excel spreadsheet model of your linear program in “standard form” with appropriate use of SUMPRODUCT functions.
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