A company wants a high level, aggregate production plan for the next 6 months. Projected orders...

 

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A company wants a high level, aggregate production plan for the next 6 months. Projected orders for the company's product are listed in the table. Over the 6-month period, units may be produced in one month and stored in inventory to meet some later month's demand. Because of seasonal factors, the cost of production is not constant, as shown in the table. Demand Production Month (units) cost ($/unit) 1 1300 100 1400 105 1000 110 4 800 115 5 1700 110 1900 110 The cost of holding an item in inventory for 1 month is $4/unit/mo. Items produced and sold in the same month are not put in inventory. The maximum number of units that can be held in inventory is 250. The initial inventory level at the beginning of the planning horizon is 200 units; the final inventory level at the end of the planning horizon is to be 100. FORMULATE the LP to determine the optimal amount to produce in each month so that demand is met while minimizing the total cost of production and inventory. Shortages are not permitted. You do NOT need to solve the LP A company wants a high level, aggregate production plan for the next 6 months. Projected orders for the company's product are listed in the table. Over the 6-month period, units may be produced in one month and stored in inventory to meet some later month's demand. Because of seasonal factors, the cost of production is not constant, as shown in the table. Demand Production Month (units) cost ($/unit) 1 1300 100 1400 105 1000 110 4 800 115 5 1700 110 1900 110 The cost of holding an item in inventory for 1 month is $4/unit/mo. Items produced and sold in the same month are not put in inventory. The maximum number of units that can be held in inventory is 250. The initial inventory level at the beginning of the planning horizon is 200 units; the final inventory level at the end of the planning horizon is to be 100. FORMULATE the LP to determine the optimal amount to produce in each month so that demand is met while minimizing the total cost of production and inventory. Shortages are not permitted. You do NOT need to solve the LP

Answer rating: 100% (QA)

Solution Let Pj production units in monthj for j12... View the full answer