San Diego State University Operations And Supply Chain Management Assignment Help - Minimize

Question - Filtron Corporation produces filtration containers used in water treatment systems. Although business
has been growing, the demand each month varies considerably. As a result, the company utilizes a
mix of part-time and full-time employees to meet production demands. Although this approach
provides Filtron with great flexibility, it resulted in increased costs and morale problems among
employees. For instance, if Filtron needs to increase production from one month to the next,
additional part-time employees have to be hired and trained, and costs go up. If Filtron has to
decrease production, the workforce has to be reduced and Filtron incurs additional costs in terms of
unemployment benefits and decreased morale. Best estimates are t ...Read More hat increasing the number of units
produced from one month to the next will increase production costs by $1.25 per unit, and that
decreasing the number of units produced will increase production costs by $1.00 per unit. In February
Filtron produced 10,000 filtration containers but only sold 7500 units; 2500 units are currently in
inventory. The sales forecasts for March, April, and May are for 12,000 units, 8000 units, and 15,000
units, respectively. In addition, Filtron has the capacity to store up to 3000 filtration containers at the
end of any month. Management would like to determine the number of units to be produced in March,
April, and May that will minimize the total cost of the monthly production increases and decreases. ...Read Less

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