The document outlines a production planning problem for a company that produces footballs to determine the optimal monthly production quantities over a 6 month period to meet forecasted demand while minimizing

1. Presented to : Presented by :
MrAmit.K. Bhardwaj Navkaran Singh
An Excel Assignment
Preet Bajaj
Sakshi Kamboj
Mandalsa Thaman
Akshat Goyal

2.  The FoxFlesh Company produces footballs. FoxFlesh must decide how
many footballs to produce each month. It has decided to use a 6-month
planning horizon.
 The forecasted demands for the next 6 months are 10,000, 15,000,
30,000, 35,000, 25,000, and 10,000.
 FoxFlesh wants to meet these demands on time, knowing that it currently
has 5000 footballs in inventory and it can use a given month’s production
to help meet the demand for the month.
 During each month there is enough production capacity to produce up to
30,000 footballs, and there is enough storage capacity to store up to
10,000 footballs at the end of the month.

3.  The forecasted production costs per football for the next 6 months are
$12.50, $12.55, $12.70, $12.80, $12.85, and $12.95, respectively.
 The holding cost per football held in inventory at the end of the month is
figured at 5%of the production cost for that month.
 The selling price for football is not considered relevant to the production
decision because it is assumed that all demand will be met exactly when
it occurs - at whatever the selling price is.
 Therefore, FoxFlesh wants to determine the production schedule that
minimizes the total production and holding costs.

5. 0.05 (5%) * Production
Cost/Unit
=0.05*C11

6. Changing cell

7. To form the spreadsheet we start with:
1. Entering Inputs – Initial inventory, Production capacity , Production cost ,
Storage capacity, Forecasted demand, Holding cost for 6 months
2. Entering any six values as the production quantities (Units produced)
which is our changing cell, that should be less than or equal to the
Production capacity.
3. On – hand Inventory - For the first cell we add up the Initial inventory
and Units produced, whereas for the subsequent cells we take the sum of
previous ending inventory and the units produced for that month and drag
along till the 6th cell. This On-hand Inventory should be greater than the
given demand.

8. 4. Ending inventory – The ending inventory is the difference between On-hand
inventory and the demand (given). Also, the ending inventory
should be less than or equal to Storage capacity.
5. Production and Holding costs - The production costs is the product of the
units produced and the production cost/unit. Holding costs is the product
of the ending inventory and holding costs which is 5% of production
cost (given).
6. Total Cost - The objective of the case is to minimize the total production
and holding costs.

9. Production costs = Units
produced* Production
cost/unit
Holding costs = Holding
cost/unit* Ending
Inventory
Target cell

10.  Ending inventories do not exceed storage capacity
Ending Inventory <= Storage capacity
 The On-hand Inventory after production are at least as large as forecasted
demand (given)
On – hand after production >= Forecasted demand
 Production quantities are non-negative and do not exceed the production
capacities
Units produced <= Production capacity

11. Changed
values

14.  We interpret the solution by comparing the production quantities with the
demand
 The FoxFlesh should produce only that much to be able to meet 1st month
demand
 In month 2 it should produce 5000 more footballs than month 2 demand,
then in month 3 it should produce just enough to meet month 3 demand, still
carrying the extra footballs in inventory frommonth 2 production.
 In month 4 FoxFlesh should finally use the 5000 footballs, along with the
maximum production amount, 30,000, to meet month 4 demand.
 Then in months 5 an 6 it should produce exactly enough to meet these
months’ demands.

15.  The total cost is $1,535,563, most of which is production cost.
 The only exception to the rule is the 20,000 footballs produced during month
2 when only 15,000 are needed. The extra 5000 units produced during month
2 are needed, however, to meet month 3 demand. Thus, month 3 capacity is
not available to meet month 4 demand, and 5000 units of month 2 capacity
are used to meet month 4 demand.
 Therefore, Solver tells us to produce footballs in months in which they are
needed - when this is possible.