Aire-Co produces home dehumidifiers at two different plants in Atlanta and Phoenix. The unit cost of production in Atlanta and Phoenix is $450 and $380, respectively. Each plant can produce a maximum of 300 units per month. Inventory carrying costs are assessed at $30 per unit in beginning inventory each month. Aire-Co estimates that demand for its product will be 300, 400 and 500 units, respectively, over the next 3 months. Aire-Co wants to be able to satisfy this demand at the minimum cost.

1. Formulate a LP model for this problem.

2. Implement your model in a spreadsheet and solve it.

3. What is the optimal solution?

4. How does the solution change if each plant is required to produce at least 50 units per month?

5. How does the solution change if each plant is required to produce at least 100 units per month?

Answer rating: 100% (QA)

Here is the LP model formulated in a spreadsheet to solve this production planning problem Variab... View the full answer