Question: 2 . Our company just won a contract to supply the government with transport vehicles. We have weekly demand to meet over the 3 months
Our company just won a contract to supply the government with transport vehicles. We have weekly demand to meet over the months of the contract, given in the table below. We currently do not have the factory or warehouse set up First we must choose how much capacity to invest in Factory costs scale linearly, and it costs us $ for each unit of weekly capacity we choose to build eg we can pay $ to be able to make units per week at normal costs, or we can by $ to have capacity of units per week Each unit at normal cost costs $ to build. We have the capacity to make overtime units at $ per unit, up to an extra of the capacity if our capacity is units, we can make up to OT units each week We also can store units from month to month. It costs us $ per month to store each unit.
a How much capacity should we build, and how much should we produce each week in order to minimize our total costs? What will our total cost be
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