A computer manufacturer is developing a production schedule for the next four quarters.Demand for this manufacturer's laptop
Question:
A computer manufacturer is developing a production schedule for the next four quarters. Demand for this manufacturer's laptop is estimated to be 1200 units in Q1; 2100 in Q2; 1500 in 3 quarters; and 600 in Q4. Up to 1400 laptops can be produced in regular time labor at a cost of $1,200 per unit each quarter. An unlimited number of laptops can be produced overtime each quarter at a cost of $1800 per unit. 2% of all units produced are defective and cannot be used to meet demand. After each quarter's demand is met and defective items are calculated, a holding cost of $300 per computer is assessed. All demands must be met on time, and units produced in one quarter can be used to meet demand for the current quarter as well as future quarters. Suppose there were no computers in inventory at the beginning of Q1. Using the shell provided in the GS 2.xlsx file, formulate and solve a linear programming model to find the production schedule that minimizes the total cost over the given planning horizon.
Problem 3 | ||||||||
Unit production cost with normal time labor | $1,200 | |||||||
Unit production cost with overtime | $1,800 | |||||||
unit holding cost | $ 300 | |||||||
Normal time production capacity every three months | 1400 | |||||||
Proportion of defectively produced units | %2 | |||||||
Initial inventory | 0 | |||||||
Quarter 1 | quarter 2 | quarter 3 | quarter 4 | |||||
Inventory level before quarter production | ||||||||
Normal time production level for the quarter | ||||||||
Normal time production capacity | ||||||||
Overtime production level for the quarter | ||||||||
Total number of units produced during the quarter | ||||||||
Number of defective units produced | ||||||||
Number available to meet quarterly demand | ||||||||
Quarterly demand | 1200 | 2100 | 1500 | 600 | ||||
Ending inventory | ||||||||
Quarter 1 | quarter 2 | quarter 3 | quarter 4 | |||||
Quarterly production costs with regular time labor | ||||||||
Quarterly production costs with overtime | ||||||||
Quarterly holding costs | ||||||||
Total quarterly costs | ||||||||
Total cost for the planning horizon |
Managerial Decision Modeling With Spreadsheets
ISBN: 9780136115830
3rd Edition
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair