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Consider the following scenario in RED TOMATO TOOLS

Consider the following scenario in RED TOMATO TOOLS

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Red Tomato makes a single product, a garden tool that sells for $40 

Red Tomato starts with 1000 of these tools in inventory and is expected to end with at least 500 in stock

 Red Tomato can temporarily backlog demand for a cost, but at the end of the time horizon, they require their backlog to be zero – This is an important constraint to remember- if we forget it, we will get strange results

 Production costs are based on parts and labor with no machine capacity issues

– They start with 80 employees can hire or fire workers for a cost

. – Workers get regular pay whether they are producing or not. There are 20 days of production per month, each month.

– We can have workers work overtime (no more than 10 hrs/mo per worker) for extra $

– We can also subcontract production out and pay a flat fee (in lieu of labor + materials)  Red Tomato would like to generate a 6 month plan that maximizes profits (revenue net of costs)

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