A manufacturing company would like to plan its production/inventory policy for the months of August, September, October,
Question:
A manufacturing company would like to plan its production/inventory policy for the months of August, September, October, and November. The product under consideration is seasonal, and its demand during particular months is estimated to be 500, 600, 800, and 1,200 units respectively. Currently, the monthly production capacity is 600 units with a unit cost of $25. Management has decided to install a new production system with a monthly capacity of 1,100 units at a unit cost of $30. However, the new system can't be installed until mid-November (hint: this time constraint provides an important constraint on the level of production activity for this month).
Assume that the beginning inventory is 250 units and that at most 400 units can be stored in a given month. If the inventory holding cost per month per item is $3, find the production schedule that minimizes the total cost of production and inventory using any LP software of your choice. Assume that demand must be met and that 100 units are required in inventory at the end of November.
i) Formulas are the problem.
2.) solve with code
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts