A firm has developed the following supply, demand, cost and inventory data. Supply Capacity (units) Overtime...

 

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A firm has developed the following supply, demand, cost and inventory data. Supply Capacity (units) Overtime 10 15 10 Period 1 2 3 Regular 45 35 35 Initial Inventory Regular time cost /unit Overtime Cost Demand Subcontract Forecast (Units) 5 5 0 Subcontract Carrying Cost /month/unit 20 units $100 $160 $200 $5 40 75 60 Assume that the holding cost (carrying cost) is applied to the end of each period and suppose that backorders are not permitted. What is the optimal allocation of the production capacity to meet demand at a minimum cost? Open the Excel file Homework 6.xlsx. Three methods will be applied to solve this problem. Method 1: Formulating the problem as a Transportation Model, then applying Excel Solver, as presented in Worksheet 1. Method 2: Applied directly Excel Solver to the data (without using Transportation format), as presented in Worksheet 2. Method 3: Formulation the problem as an integer Linear Programming, then applying Lingo Software to get the solution (See Lab Operations Research 1 and watch the Video Tutorial 7 Help for LP formulation in Aggregate Planning) A firm has developed the following supply, demand, cost and inventory data. Supply Capacity (units) Overtime 10 15 10 Period 1 2 3 Regular 45 35 35 Initial Inventory Regular time cost /unit Overtime Cost Demand Subcontract Forecast (Units) 5 5 0 Subcontract Carrying Cost /month/unit 20 units $100 $160 $200 $5 40 75 60 Assume that the holding cost (carrying cost) is applied to the end of each period and suppose that backorders are not permitted. What is the optimal allocation of the production capacity to meet demand at a minimum cost? Open the Excel file Homework 6.xlsx. Three methods will be applied to solve this problem. Method 1: Formulating the problem as a Transportation Model, then applying Excel Solver, as presented in Worksheet 1. Method 2: Applied directly Excel Solver to the data (without using Transportation format), as presented in Worksheet 2. Method 3: Formulation the problem as an integer Linear Programming, then applying Lingo Software to get the solution (See Lab Operations Research 1 and watch the Video Tutorial 7 Help for LP formulation in Aggregate Planning)

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Method 1 Transportation Model with Excel Solver Set up a transportation model in Excel where the supply and demand quantities are represented as a mat... View the full answer