(Liberatore and Miller, 1985) A manufacturing facility uses two production lines to produce three products over the next 6 months. Backlogged demand is not allowed. However, a product may be overstocked to meet demand in later months. The following table provides the data associated with the demand, production, and storage of the three products.

There is a fixed cost for switching a line from one product to another. The following tables give the switching cost, the production rates, and the unit production cost for each line:

Develop a model for detennining the optimal production schedule.

Transcribed Image Text:

Demand in period Unit holding Initial Product 234 6 o)/month inventory 50 30 4 60 20 45 40 60 50 30 30 55 30 40 20 70 40 30 .50 .35 45 2 75 60 Line switching cost ($) Product I Product 2 Product3 180 Line 1 Line 2 200 250 300 174 200 Production rate (units/month) Unit production cost (S) Produc I Product 2 Producr3 Produc Product 2 Product 3 Line 1 Line 2 40 90 60 70 80 60 10 12 15 10