Phoenix Computer

Mary Mattson

CASE 1- Phoenix Computer

Problem Statement

Phoenix Computer manufactures and sells computers directly to customers. Sales orders are made through the phone and company’s website. They are introducing several new laptop models over the next few months. They need to train new and current employees as technical support personnel to specialize in the new laptop systems. They estimate that the need for laptop specialists will be 20-May, 30-June,85- July, 85-August, and 100 in September. The numbers of current employees who will be available for training are 15-March, 20-April, 0-May, 5-June, and 10-July. When these current employees become a laptop specialist, their position will need to be backfilled by new employee. The training class can only have 25 students each month. Phoenix Computers objective is to minimize the additional cost of salary and training.

Analysis

Phoenix Computer will have an increment cost of $8,250 (2250*3+1500) for hiring new employee to be trained as a laptop specialist. The $2250 is the monthly salary ($27000/12). If they put the current employees through the training program then the increment cost will be $5500(2250*2+1000). The 1000 is for the cost to train current employees and then the backfill amount to replace the current employee position is $4500. In September the monthly payroll costs will $25,000. They need 100 new employees to be either a backfill or train technical support, so 100* $2250 is $225,000.

The objective function is to minimize cost= Min: (8250*Feb3)+(8250*Mar3)+(8250*Apr3)+(8250*May3)+(8250*Jun3)+(5500*Mar2)+(5500*Apr2)+(5500*May2)+(5500*Jun2)+(5500*Jul2)+(2250*Idlemay)+(2250*IdleJun)+(2250*IdleJul)+(2250*IdleAug)+(2250*IdleSep). The minimization cost for training $698,750.

Phoenix could obtain the optimal cost by hiring:

5 current employees in March, April, May, June, July

25 current employees in March, April, and May

15 new employees in February and March

15 current employees...