Frisbee Square
Frisbee Square is a factory that makes the world's best frisbees. Today, they are planning production for the first quarter of next year, Jan-Mar, when they are going to dedicate the whole facility to making their two best sellers: Freezip and Sprinter.
The demand for each type of frisbee is estimated as follows:
| SKU | Jan | Feb | Mar | |
|---|---|---|---|---|
| Freezip | 15,300 | 11,200 | 13,000 | |
| Sprinter | 14,000 | 12,500 | 15,800 |
Demand must be met exactly in every month but inventory may be carried over from one month to the next.
In addition, it's expected that there will be 3,000 Freezip and 2,500 Sprinter in inventory at the start of the quarter.
It's known that the production rate is 1.2 unite/minute for Freezip and 1.4 unit/minute for Sprinter.
It's also known that holding cost and total production capacity (across all the production lines) varies monthly as follows:
| Month | Capacity (hrs) | Holding Cost (cents) |
|---|---|---|
| Jan | 465 | 12 |
| Feb | 320 | 13 |
| Mar | 315 | 10 |
Finally, the production costs are 3.00 and 2.80 dollars per unit for Freezip and Sprinter, respectively.
How should Frisbee Square operate over the next quarter to meet demand while minimizing its total operation cost?