Use the Table Below to Answer the Following Questions) Use a Linear Optimization Model Based on the Data to Hides

question 51

Multiple Choice

Use the table below to answer the following questions) .
Letherin Hides is a company that makes boots specifically targeting college students. Forecasts of sales for the next year are 200 in the summer, 450 in the autumn, and 500 in the winter.
Accessories that are used on the boots are purchased from a supplier for $31.66. The cost of capital is estimated to be 24% per year or 6% per quarter) ; thus, the holding cost per item is
0.06$31.66) = $1.9 per quarter rounded figure) . Letherin Hides hires freelance art designers at part-time to craft designs during the summer, and they earn $6 per hour. In the autumn, labor is more difficult to keep, and the owner must pay $6.5 per hour to retain qualified help. Because of the high demand for part-time help during the winter holiday season, labor rates are higher in the winter, and workers earn $7.75 per hour. Each boot design takes 2 hours to complete. How should production be planned over the three quarters to minimize the combined production and inventory holding costs?
The table below provides information on Letherin Hides boot design cost and production. $$\begin{array} { | l | l | l | l | } \hline \text { Datherin Hides } & & & \\\hline & & & \\\hline \text { Data }& & \\\hline & & & \\\hline & \text { Sumuner } & \text { Autumn } & \text { Winter } \\\hline \begin{array} { l } \text { Unit Production } \\\text { Cost }\end{array} & 12 & 13 & 15.5 \\\hline \text { Unit Inventory } & & & \\\text { Holding Cost } & 1.9 & 1.9 & 1.9 \\\hline \text { demand } & 200 & 450 & 500 \\\hline\end{array}$$ Use a linear optimization model based on the data to answer the following questions.
-According to the linear optimization model, what is the total cost incurred by Letherin Hides for the combined seasons?

• A) $17,885
• B) $15,605
• C) $15,700
• D) $18,700

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Definitions:

Error

Error, in a statistical context, signifies the difference between the observed value and the true value.

F-ratio Distribution

A probability distribution used in ANOVA tests, representing the ratio of two variances to assess the significance of group differences.

Positively Skewed

Describes a distribution with a tail that extends to the right, indicating a majority of the data points are situated on the left side of the distribution.

Theoretical Distribution

A mathematical function that describes all the possible values and likelihoods that a random variable can take within a given range.