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Green Mills - Level & Chase Worked

The document provides cost and production data for a wood products company over multiple months. It aims to minimize total costs while meeting monthly demand. Key details include: Chilean wood costs $150/1000 board feet vs $400 locally, with $50 transportation from Chile. Demand ranges from 1000-2200 thousand board feet per month. The company has 20 employees with a monthly capacity of 50000 board feet each. The objective is to determine the optimal production and sourcing strategy each month to minimize overall costs.

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Jagan JC
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53 views11 pages

Green Mills - Level & Chase Worked

The document provides cost and production data for a wood products company over multiple months. It aims to minimize total costs while meeting monthly demand. Key details include: Chilean wood costs $150/1000 board feet vs $400 locally, with $50 transportation from Chile. Demand ranges from 1000-2200 thousand board feet per month. The company has 20 employees with a monthly capacity of 50000 board feet each. The objective is to determine the optimal production and sourcing strategy each month to minimize overall costs.

Uploaded by

Jagan JC
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Data:

Local Raw Softwood cost 400 per Tousand board feet


Chile Raw Softwood cost 150 per Tousand board feet
Transportation cost from Chile 50
Chile Shipping Capacity 1500000 Per Month
Harvesting + Shipping time 1 Month

Constraints:

Employee capacity 50000 board feet per month


Work Schedule 160 Hours per month
Total Employees 20
Max. Inventory capacity 3000000 board feet per month
Overtime 25% of Regular time
Workers Monthly basis hiring
Hiring & Training cost 1000 per Employee
Layoff cost 500 per Employee

Demand Cost
Month Cost Factor
(000) (Per 1000 board feet)
Jan 1000 Regular time 150
Feb 1100 Overtime 200
Mar 1300 Holding 25
Apr 1500 Shipping 50
May 1800 U.S Spot Market 400
Jun 2200
Jul 2500
Aug 2400
Sep 2000
Oct 1600
Nov 1200
Dec 800
Decision Variable:
Xjan
Xfeb
Xmar

Strategy:
Maintain constant Workforce &
Output rate
Level Employee Inventering
Backordering
Overtime & Undertime

Can vary Workforce & Output


Minimize Inventory,
Chase
backordering & Sub-
contracting

Mixed Combination of both

Objective:
Minimize Cost & meet demand
Cost Jan Feb Mar Apr May Jun
Regular Time 200 200 200 200 200 200
Over Time 250 250 250 250 250 250
US Spot 400 400 400 400 400 400
Inventory 25 25 25 25 25 25

Man power 20 20 20 20 20 20
Hiring & Training cost 1000 1000 1000 1000 1000 1000
Layoff Cost 500 500 500 500 500 500

Hiring Each Month 0 0 0 0 0 0


Layoff Each Month 0 0 0 0 0 0

Production Decision Jan Feb Mar Apr May Jun


Regular Time 1000 1000 1000 1000 1000 1000
Over Time 250 250 250 250 250 250
US Spot 0 0 0 0 450 950
Total Received 1250 1500 1650 1600 1800 2200
>= >= >= >= >= >=
Demand 1000 1100 1300 1500 1800 2200
Regular Time Per Day Used Capacity 1000 1000 1000 1000 1000 1000
<= <= <= <= <= <=
Regular Time Per Day Capacity 1000 1000 1000 1000 1000 1000
Over Time Per Day Used Capacity 250 250 250 250 250 250
<= <= <= <= <= <=
Over Time Per Day Capacity 250 250 250 250 250 250
Total Inventory 250 400 350 100 0 0
<= <= <= <= <= <=
Inventory Capacity 3000 3000 3000 3000 3000 3000
Shipped Quantity 1250 1250 1250 1250 1250 1250
<= <= <= <= <= <=
Shipping Capacity 1500 1500 1500 1500 1500 1500
Jul Aug Sep Oct Nov Dec
200 200 200 200 200 200
250 250 250 250 250 250
400 400 400 400 400 400
25 25 25 25 25 25 50 Per Day Production Capacity of an Empl
12.5 Per Day Production Capacity of an Empl
20 20 20 20 20 20
1000 1000 1000 1000 1000 1000
500 500 500 500 500 500

0 0 0 0 0 0
0 0 0 0 0 0

Jul Aug Sep Oct Nov Dec


1000 1000 1000 1000 1000 800 11800 <= 12000
250 250 250 250 200 0 2700 <= 3000
1250 1150 750 350 0 0 4900 <= 19400
2500 2400 2000 1600 1200 800
>= >= >= >= >= >=
2500 2400 2000 1600 1200 800 Total Cost
1000 1000 1000 1000 1000 800 5022500
<= <= <= <= <= <=
1000 1000 1000 1000 1000 1000
250 250 250 250 200 0
<= <= <= <= <= <=
250 250 250 250 250 250
0 0 0 0 0 0
<= <= <= <= <= <=
3000 3000 3000 3000 3000 3000
1250 1250 1250 1250 1200 800
<= <= <= <= <= <=
1500 1500 1500 1500 1500 1500
roduction Capacity of an Employee in Regular Time
roduction Capacity of an Employee in Over time
Cost Jan Feb Mar Apr May Jun
Regular Time 200 200 200 200 200 200
Over Time 250 250 250 250 250 250
US Spot 400 400 400 400 400 400
Inventory 25 25 25 25 25 25

Man power 20 22 26 30 30 30
Hiring & Training cost 1000 1000 1000 1000 1000 1000
Layoff Cost 500 500 500 500 500 500

Hiring Each Month 0 2 4 4 0 0


Layoff Each Month 0 0 0 0 0 0

Production Decision Jan Feb Mar Apr May Jun


Variable Regular Time 1000 1100 1300 1500 1500 1500
Variable US Spot 0 0 0 0 300 700
Total Received 1000 1100 1300 1500 1800 2200
>= >= >= >= >= >=
Demand 1000 1100 1300 1500 1800 2200
Regular Time Per Day Used Capacity 1000 1100 1300 1500 1500 1500
<= <= <= <= <= <=
Regular Time Per Day Capacity 1000 1100 1300 1500 1500 1500
Shipped Quantity 1000 1100 1300 1500 1500 1500
<= <= <= <= <= <=
Shipping Capacity 1500 1500 1500 1500 1500 1500
Jul Aug Sep Oct Nov Dec
200 200 200 200 200 200
250 250 250 250 250 250
400 400 400 400 400 400
25 25 25 25 25 25 50
12.5
30 30 30 30 24 16
1000 1000 1000 1000 1000 1000
500 500 500 500 500 500
IF(C9-B9>0,0,MAX(B9:C9)-MIN(B9:C9))
0 0 0 0 0 0
0 0 0 0 6 8

Jul Aug Sep Oct Nov Dec


1500 1500 1500 1500 1200 800 15900 <=
1000 900 500 100 0 0 3500 <=
2500 2400 2000 1600 1200 800
>= >= >= >= >= >=
2500 2400 2000 1600 1200 800
1500 1500 1500 1500 1200 800
<= <= <= <= <= <=
1500 1500 1500 1500 1200 800
1500 1500 1500 1500 1200 800
<= <= <= <= <= <=
1500 1500 1500 1500 1500 1500
Per Day Production Capacity of an Employee in Regular Time
Per Day Production Capacity of an Employee in Over time

IF(C9-B9>0,0,MAX(B9:C9)-MIN(B9:C9))

15900
19400

Hiring & Layoff Cost


17000
Product & Transport
4580000

Total Cost
4597000
Jan Feb Mar Apr
Demand 1000 1100 1300 1500
Regular Time per month 160 160 160 160
Over Time max per month 40 40 40 40
Production Capacity board per employee/ month
50000 50000 50000 50000
Regular month wages per worker(Per 1000 board
feet) 24000 24000 24000 24000
overtime Wages per month(Per 1000 board feet)
8000 8000 8000 8000
Hiring Cost per worker 1000 1000 1000 1000
layoff cost per worker 500 500 500 500
Holding Cost(Per 1000 board feet) 25 25 25 25
shipping cost(Per 1000 board feet) 50 50 50 50
Beginning workers 20 20 20 20

Beginning Wokers 20 0.000125 0.0001375 0.0001625


Workers hired 0 1.25E-05 2.5E-05 2.5E-05
Workers fired 19.999875 0 0 0
Wokers Available 0.000125 0.0001375 0.0001625 0.0001875
Regular hours Available 0.02 0.022 0.026 0.03
over time hours available 0 0 0 0
Maximum overtime hours available 0.005 0.0055 0.0065 0.0075

Total hours availble for production 0.02 0.022 0.026 0.03


production capacity board per month 1000 1100 1300 1500

Beginning inventory 0 0 0 0
Production produced board (1000 board feet) 1000 1100 1300 1500
Available to meet Demand 1000 1100 1300 1500
Actual Demand 1000 1100 1300 1500
Ending Inventory 0 0 0 0

Cost
Regular labour cost (per 1000 board feet) 3 3.3 3.9 4.5
overtime Wages cost (per 1000 board feet) 0 0 0 0
Materials Cost local(per 1000 board feet) 200000 220000 260000 300000
Hiring cost 0 0.0125 0.025 0.025
Firing Cost 9999.9375 0 0 0
Holding Cost 0 0 0 0
Total 210002.9375 220003.313 260003.925 300004.525
May Jun Jul Aug Sep Oct Nov Dec
1800 2200 2500 2400 2000 1600 1200 800
160 160 160 160 160 160 160 160
40 40 40 40 40 40 40 40

50000 50000 50000 50000 50000 50000 50000 50000

24000 24000 24000 24000 24000 24000 24000 24000

8000 8000 8000 8000 8000 8000 8000 8000

1000 1000 1000 1000 1000 1000 1000 1000


500 500 500 500 500 500 500 500
25 25 25 25 25 25 25 25
50 50 50 50 50 50 50 50
20 20 20 20 20 20 20 20

0.0001875 0.000225 0.000275 0.0003125 0.0003 0.00025 0.0002 0.00015


3.75E-05 5E-05 3.75E-05 0 0 0 0 0
0 0 0 1.25E-05 5E-05 5E-05 5E-05 5E-05
0.000225 0.000275 0.0003125 0.0003 0.00025 0.0002 0.00015 0.0001
0.036 0.044 0.05 0.048 0.04 0.032 0.024 0.016
0 0 0 0 0 0 0 0
0.009 0.011 0.0125 0.012 0.01 0.008 0.006 0.004

0.036 0.044 0.05 0.048 0.04 0.032 0.024 0.016


1800 2200 2500 2400 2000 1600 1200 800

0 0 0 0 0 0 0 0
1800 2200 2500 2400 2000 1600 1200 800
1800 2200 2500 2400 2000 1600 1200 800
1800 2200 2500 2400 2000 1600 1200 800
0 0 0 0 0 0 0 0

5.4 6.6 7.5 7.2 6 4.8 3.6 2.4 58.2


0 0 0 0 0 0 0 0 0
360000 440000 500000 480000 400000 320000 240000 160000 3880000
0.0375 0.05 0.0375 0 0 0 0 0 0.1875
0 0 0 0.00625 0.025 0.025 0.025 0.025 10000.04375
0 0 0 0 0 0 0 0 0
360005.438 440006.65 500007.538 480007.206 400006.025 320004.825 240003.625 160002.425 3890058.431
Total Cost

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