Question: BP Computer Services assembles its own brand of personal computers from component parts it purchases overseas and domestically. BP has enough regular production capacity to
- BP Computer Services assembles its own brand of personal computers from component parts it purchases overseas and domestically. BP has enough regular production capacity to produce up to 2000 computers per week. It can produce an additional 300 computers with overtime. Also, an additional 500 computers per week can be sourced through a subcontractor. The cost of assembling, inspecting, and packaging a computer during regular time is $190. Overtime production of a computer costs $220, and subcontracting has a unit cost of $230. Further, it costs $40 per computer per week to hold a computer in inventory for future delivery, but BPs storage facility can store a maximum of only 1500 computers. BP wants to meet all customer orders with no shortages to provide quality service. BPs confirmed orders for the next six weeks are given below.
| Week | 1 | 2 | 3 | 4 | 5 | 6 |
| Unit Orders | 1800 | 2600 | 2800 | 2900 | 1200 | 3300 |
- Determine the least cost master production schedule and inventory plan for BP given the availability of regular and overtime production and inventory storage.
b. During the six-week planning horizon, what is the maximum and minimum inventory levels your model plans for BPs storage facility
Please use the Excel Solver tool for your deliverable.
Thanks
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