Supply Chain Management LGMT 683
Problem Set 2
1. eGo is an electric scooter manufacturer in Texas. The plant currently employs 80
workers who operate for 22 days a month, eight hours each day. Workers are paid $12
per hour for normal working hours and $18 per hour for overtime. Overtime is limited
to a maximum of 25 hours per month per employee. One worker can assemble a
scooter every 12 minutes. Component costs for each scooter is $40. Carrying inventory
from one month to the next incurs a cost of $5 per scooter per month. Assume the
starting inventory of 24,500 units and eGo wants to end the year with the same level of
inventory. eGo is making production plans for the coming year. Below table shows the
forecasted monthly demand.