Major: Electronic Commerce

Name: Jacky D.R

No.:021413030

CaseStudy: MintendoGameGirl
1.Decision Variables
Wt=Workforcesizeformontht,t=1,,6.
Ht=Numberofemployeeshiredatthebeginningofmontht,t=1,,6.
Lt=Numberofemployeeslaidoffatthebeginningofmontht,t=1,,6.
Pt=Numberofunitsproducedinmontht,t=1,,6.
It=Inventoryattheendofmontht,t=1,,6.
St=Numberofunitsstockedout/backloggedattheendofmontht,t=1,,6.
Ct=Numberofunitssubcontractedformontht,t=1,,6.
Ot=Numberofovertimehoursworkedinmontht,t=1,,6.
2ObjectiveFunction
(Forshort,=

standsfor .)

Regulartimelaborcost= (15*8*20)Wt
Overtimelaborcost= 22.5Qt
Costofhiringandlayoffs= 1000Ht+5000Lt
Costofinventoryandstockout= 4It+10St
Costofmaterialsandsubcontracting= 12Pt+18Ct
TotalCostIncurred=(15*8*20)Wt+22.5Qt+ 1000Ht+5000Lt+4It+10St
+12Pt+18Ct
3Constraints
Workforce,hiring,andlayoffconstraints:
Wt=Wt1 + HtLt fort=1,,6
Capacityconstraints:
Pt<=8/0.25*20Wt+ Qt/0.25 fort=1,,6
Inventorybalanceconstraints:
It1+Pt+Ct =Dt +St1+ItSt fort=1,,6
Overtimelimitconstraints:
Qt<(40*30/720*8)Wt fort=1,,6
4UsingEXCELforAggregatePlanning.
Step1:Buildatablecontainingeach decisionvariable.
Aggregate Plan Decision Variables

Period

Ht

Lt

Wt

Ot

It

St

Ct

Pt

#Hired

#Laid off

# Workforce

Overtime

Inventory

Stockout

Subconstract

Production

Demand

300

50,000

96.87506928

203.1249312

49999.98307

100,000

203.1249312

109999.9628

110,000

203.1249312

129999.956

130,000

10

203.1249312

2321.427786

40714.4884

139285.6671

180,000

11

203.1249312

2321.427786

110714.4884

139285.6671

250,000

12

203.1249312

300000

300,000

1 5

Step2:Constructatablefortheconstraints.
Contraints
Workforce

Production

Inventory

Over time

5.15132E-07

79999.97292

2321.427786

-8.52651E-14

19999.99323

2321.427786

2.84217E-14

2321.427786

2.84217E-14

5.45697E-12

-1.13687E-13

129999.956

2321.427786

Step3:CreateacellcontainingtheobiectivefunctionanduseTools|SolvertoinvokeSolver.
Aggregate Plan Costs
Period

Hiring

Cost

Layoff Cost

Regular time

Over time

Inventory

Stockout

Subcontract

Material

484375.3464

487499.835

599999.7969

487499.835

1319999.553

487499.835

1559999.472

10

487499.835

52232.12517

732860.7912

1671428.006

11

487499.835

52232.12517

1992860.791

1671428.006

12

487499.835

3000000

Total Cost=$

16062415.02

Revenue

53500000

Profit

37437584.98

Question1:
Theimpactofofferingthediscountof$5inSeptemberaccordingtoSandrasidea.
TheoptionalaggregateplanisshowninTable below.
Demand according to Sandra's idea
Month

Demand Forecast

July

100000

August

110000

September

324000

October

126000

November

175000

December

300000

2 5

Aggregate Plan Decision Variables

Period

Ht

Lt

Wt

Ot

It

St

Ct

Pt

#Hired

#Laid off

# Workforce

Overtime

Inventory

Stockout

Subconstract

Production

Demand

300

50,000

64.84375

235.15625

50000

100,000

235.15625

40500

150500

110,000

235.15625

2687.5

122250

161250

324,000

10

235.15625

24500

150500

126,000

11

235.15625

150500

175,000

12

235.15625

300000

300,000

Regular time

Over time

Inventory

Stockout

Aggregate Plan Costs

Hiring

Period t

Layoff Cost

Subcontract

Material

Cost
7

324218.75

564375

600000

564375

162000

1806000

564375

60468.75

2200500

1935000

10

564375

98000

1806000

11

564375

1806000

12

564375

3000000

Total Cost

17184437.5

Revenue

55,130,000

Profit

37,945,563

Theimpactofofferingthediscountof$5inNovemberaccordingtoBillsidea.
TheoptionalaggregateplanisshowninTable below.
Demand according to Bill's idea
Month

Demand Forecast

July

100000

August

110000

September

130000

October

180000

November

465000

December

210000

Aggregate Plan Decision Variables

Period

Ht

Lt

Wt

Ot

It

St

Ct

Pt

#Hired

#Laid off

# Workforce

Overtime

Inventory

Stockout

Subconstract

Production

300

50,000

96.875

203.125

50000

Demand

100,000

3 5

203.125

110000

110,000

203.125

130000

130,000

10

203.125

2321.4285

40714.28276

139285.717

180,000

11

203.125

2321.4285

325714.2828

139285.717

465,000

12

203.125

210000

210,000

Over time

Inventory

Stockout

Aggregate Plan Costs

Hiring

Period t

Cost

Layoff Cost

Regular time

Subcontract

Material

484375

487500

600000

487500

1320000

487500

1560000

10

487500

52232.142

732857.0896

1671428.61

11

487500

52232.142

5862857.09

1671428.61

12

487500

2100000

Total Cost

19032410.68

Revenue

57,425,000

Profit

38,392,589

Observe that a price promotion in September results in a higher profit than no promotion, whereas a promotion in
Novemberresultsinahigherprofitthan bothofthem.
Asaresult,Mintendo shouldofferthediscountinthepeakmonthofNovember.
Question2:
Theimpactofofferingthediscountof$10inSeptemberaccordingtoSandrasidea.
TheoptionalaggregateplanisshowninTable below.
Total Cost

$17184437.5

Revenue

$53,510,000

Profit

$36,325,563

Theimpactofofferingthediscountof$10inNovemberaccordingtoBillsidea.
TheoptionalaggregateplanisshowninTable below.
Total Cost

$19032410.71

Revenue

$55,100,000

Profit

$36,067,589

.Ifthereisnopromotion,theoptionalaggregateplanisshownintable below.
Total Cost=

$16062415.02

Revenue

$53500000

Profit

$37437584.98

Observe that a price promotion in September results in a higher profit than a promotion in November, whereas no
promotion resultsinahighestprofit.
4 5

Asaresult,ifofferingthediscountof$10,Mintendoshouldnotofferanypricepromotion..
Question3:
.Ifthecostrisesto$22/unitforsubcontractingandofferingthediscountof$5inSeptember,theimpactaccordingto
Sandrasideaisshownintablebelow.
Aggregate Plan Decision Variables

Period

Ht

Lt

Wt

Ot

It

St

Ct

Pt

#Hired

#Laid off

# Workforce

Overtime

Inventory

Stockout

Subconstract

Production

Demand

300

50,000

300

36285.714

86285.7143

100,000

300

118285.71

192000

110,000

300

3428.5714

205714.286

324,000

10

26.5625

273.4375

126000

126,000

11

273.4375

175000

175,000

12

273.4375

300000

300,000

Regular time

Over time

Inventory

Aggregate Plan Costs

Period t

Hiring Cost

Layoff Cost

Stockout

Subcontract

Material

720000

145142.86

1035428.57

720000

473142.86

2304000

720000

77142.857

2468571.43

10

132812.5

656250

1512000

11

656250

2100000

12

656250

3000000

Total Cost

17376991.07

Revenue

55,130,000

Profit

37,753,009

.Ifthecostrisesto$22/unitforsubcontractingandofferingthediscountof$5inNovember,theimpactaccordingto
Billsideaisshownintablebelow
Total Cost

$19619464.29

Revenue

$57,425,000

Profit

$37,805,536

.Ifthecostrisesto$22/unitforsubcontractingandofferingthediscountof$5,theimpactofnopricepromotionis
shownintablebelow
Total Cost

$16219464.29

Revenue

$53500000

Profit

$37280535.71

Accordingtothetablesshownabove,offeringthediscountof$5inNovemberstillresultsinthehighestprofit.Sothere
isnoimpacttothedecisionwhenthecostrisesto$22/unitforsubcontracting.

5 5