Q1-a

Q1-b
Q2a w 4
p 15
s 1
c 2
r 0.65
Profit share 0.35

𝜎
µ 5000
2000

Old model New Model

Cu 11 Cu
Co 3 Co

CR 0.7857142857143 CR
z 0.8 z
E(z) 0.12 E(z)
Ans(i) Q 6600 Q

E(LS) 240 E(LS)

E(Sales) 4760 E(Sales)
Ans(ii) E(LO) 1840 E(LO)

Saregama Profit 46840 Profit

Ans(iii)- NO Since Saregama's profit decreases under revenue sharing contract, it should not sign new contract.

Studio Profit 13200 Profit

Ans(iv) - YES Since Studio's profit increases under revenue sharing contract, it should sign new contract.

Q2b
w' 1.625
CR 0.9285714285714
z 1.46
E(z) 0.0325
Q 7920
E(LS) 65
E(Sales) 4935
E(LO) 2985

Profit Saregama 38231.25 p*r*E(Sales) + E(LO) - Q*w'

 Studio 22938.75 p*(1-r)*E(Sales) + Q*(w'-c)

Saregama should not sign the new contract since its profit
decreases
Ans:

Studio should sign the new contract since its profit increases
 Marks break-up
6.75 1
2 1

0.771428571428572
0.76 1
0.129
6520 1

258 1
4742 1
1778 2

28452.5 2+2

should not sign new contract.

31415.5 2+2

ld sign new contract.

1
1
Aggregate Production Planning
Given data
January February March April Total
Beginning Inventory 700
Demand Forecast 2500 3000 3500 2800 11800
Number of Working Days by Month 20 20 20 20 80
Initial number of workers available 0

Costs
Materials $15.00 $ per unit
Inventory holding cost $3.00 $ per unit per month
Marginal cost of stockout $0.00 $ per unit per month
Marginal cost of subcontracting $45.00 $ per unit
Hiring and training cost $0.00 $ per worker
Layoff cost $0.00 $ per worker
Labor hours required per unit 4.0 $ per unit
Regular Time labor cost $6.00 $ per hour
Overtime cost $9.00 $ per hour
Regular Hours/day 8 $ per day
(1) Aggregate Production Planning Requirements

Average Monthly
January February March April
Worker Requirement
Beginning Inventory 700 625 750 875
Demand Forecast 2,500 3,000 3,500 2,800
Safety Stock (.25 x Demand Forecast) 625 750 875 700
Production Requirement 2,425 3,125 3,625 2,625
Ending Inventory 625 750 875 700
No. of working Days 20 20 20 20
Monthly Reuirement of Workers 61 78 91 66 74
Monthly Requirement of production hours 9,700 12,500 14,500 10,500 47,200
Monthly Labor hours available 160 160 160 160 640

(2) Costs of various Production Plans

Production Plan 1: Constant Workforce; Subcontract
January February March April Total
Production Requirement 2,425 3,110 3,625 2,625
Working Day per Month 20 20 20 20
No. of workers required to meet the monthly requirement 61 78 91 66
Production Hours Available (Working Day x 8 Hrs./Day x 61
9,760 9,760 9,760 9,760
Workers)*
Actual Production 2,440 2,440 2,440 2,440
Unit Excess 15 0 0 0
Units Subcontracted (Production Requirement - Actual
0 670 1,185 185
Production)
Subcontracting Cost $0 $30,150 $53,325 $8,325 $91,800
Inventory Holding Cost $1,920 $2,250 $2,625 $2,100 $8,895
Regular Time Cost $58,560 $58,560 $58,560 $58,560 $234,240
Total Material cost (Actual Production * Material cost) $36,600 $36,600 $36,600 $36,600 $146,400
$481,335

Production Plan 2: Constant Workforce; Overtime

January February March April Total
Production Requirement 2,425 3,110 3,625 2,625
Working Day per Month 20 20 20 20
No. of workers required to meet the monthly requirement 61 78 91 66
Production Hours Available (Working Day x 8 Hrs./Day x 61
9,760 9,760 9,760 9,760
Workers)*
Actual Production 2,440 2,440 2,440 2,440
Unit Excess 15 0 0 0
Units Required via Overtime (Production Requirement - Actual
0 670 1,185 185
Production)
Overtime hours required 0 2,680 4,740 740
Overtime Cost $0 $24,120 $42,660 $6,660 $73,440
Inventory Holding Cost $1,920 $2,250 $2,625 $2,100 $8,895
Regular Time Cost $58,560 $58,560 $58,560 $58,560 $234,240
Total Material cost (Production Requirement * Material cost) $36,375 $46,650 $54,375 $39,375 $176,775
$493,350
Q3b- APP

Marks will be given for following only

Decision variables
Objective function
Constraints

No marks for only parameters listing

_total_solve_time = 0.015625

totalcost = 481335

UP [*] :=
0 0
1 2440
2 2440
3 2440
4 2440
;

UO [*] :=
0 0
1 0
2 0
3 0
4 0
;
US [*] :=
0 0
1 0
2 670
3 1185
4 185
;

I [*] :=
0 700
1 640
2 750
3 875
4 700
;

WF = 61

WHO [*] :=
0 0
1 0
2 0
3 0
4 0
;

minimize totalcost:
39*UP[1] + 39*UP[2] + 39*UP[3] + 39*UP[4] + 51*UO[1] + 51*UO[2] +
51*UO[3] + 51*UO[4] + 45*US[1] + 45*US[2] + 45*US[3] + 45*US[4] +
3*I[1] + 3*I[2] + 3*I[3] + 3*I[4];

subject to Inv_fix:
I[0] = 700;

subject to Inventory_Con[1]:
UP[1] + UO[1] + US[1] + I[0] - I[1] >= 2500;

subject to Inventory_Con[2]:
UP[2] + UO[2] + US[2] + I[1] - I[2] >= 3000;

subject to Inventory_Con[3]:
UP[3] + UO[3] + US[3] + I[2] - I[3] >= 3500;

subject to Inventory_Con[4]:
UP[4] + UO[4] + US[4] + I[3] - I[4] >= 2800;

subject to SafetyStockCon[1]:
I[1] >= 625;

subject to SafetyStockCon[2]:
I[2] >= 750;

subject to SafetyStockCon[3]:
I[3] >= 875;

subject to SafetyStockCon[4]:
I[4] >= 700;

subject to OvertimeCon[1]:
-UO[1] + 0.25*WHO[1] = 0;

subject to OvertimeCon[2]:
-UO[2] + 0.25*WHO[2] = 0;

subject to OvertimeCon[3]:
-UO[3] + 0.25*WHO[3] = 0;

subject to OvertimeCon[4]:
-UO[4] + 0.25*WHO[4] = 0;

subject to Regulartime_con[1]:
-UP[1] = -2440;

subject to Regulartime_con[2]:
-UP[2] = -2440;

subject to Regulartime_con[3]:
-UP[3] = -2440;

subject to Regulartime_con[4]:
-UP[4] = -2440;
Q4- MRP

widget LT = 1 week nov dec jan feb march

Required quantity 1500 2000 1800

On hand inventory 500 500 500
Net requirement 1000 2000 1800
Planned order receipt 1000 2000 1800
planned order release 1000 2000 1800

A(3) LT = 1 week nov dec jan feb march

Required quantity 3000 6000 5400

On hand inventory 2000 2000
Net requirement 1000 6000 5400
Planned order receipt 2400 5000 5000
planned order release 2400 5000 5000

B(2) LT = 1 week nov dec jan feb march

Required quantity 2000 4000 3600

On hand inventory 1500 1500
Net requirement 500 4000 3600
Planned order receipt 500 4000 3600
planned order release 500 4000 3600

C(1) LT = 1 week nov dec jan feb march

Required quantity 1000 2000 1800

On hand inventory 1000 1000
Net requirement 0 2000 1800
Planned order receipt 2000 1800
planned order release 2000 1800
april

april

april

april