Question: IED Inc. operates two manufacturing plants ( A and B ) that have the capability to produce three different products for the aerospace industry: Ailerons,
IED Inc. operates two manufacturing plants A and that have the capability to produce three different
products for the aerospace industry: Ailerons, Elevons, and Flaps. Your consulting group "Optimize
Consulting" is responsible to determine a production, inventory, distribution, and marketing plan for the
next six periods that will ensure profit maximization and provide management with a useful decision
making tool.
In order to facilitate your analysis, IED Inc, has gathered the necessary system requirements that will be
needed for your model. These include the revenues generated from sales, costs incurred throughout the
manufacturing process, as well as projected demand for all periods:
Revenues are generated by selling ailerons, elevons, and flaps at the following unit prices:
Costs associated with obtaining raw materials, production, storage and shipping are summarized below.
Plant A has hours of regular time labor available per period and plant B has hours of regular
time labor available per period. Overtime hours can be scheduled at both plants if necessary. Your group
needs to incorporate special restrictions into the model to ensure that labor in consecutive periods does
not differ by more than five pereent. The table below shows costs associated with regular and overtime
labor for each period.
Two types of raw materials are used: and There are of raw material and of
raw material available each period. Costs differ between plants because of the proximity of the vendor
in relation to each plant. Raw material costs for each plant are:
Once an aileron, elevon, or flap is produced, it is either sent to the distribution center DC or stored until
the next period. There is a limit on the number of products units that can be kept in storage at the end of
any given period because of the size of the storage area in each plant. A maximum of units of all
products combined can be stored in plant A and units can be stored in plant B Shipping and inventory
costs are shown below.
The sales department provided the following production requirements based on customer contracts and
agreements that must be met throughout the next six periods of production.
Supplemental demand can be created by advertising. Advertising in any given period has an effect on
demand in future periods. The unit investment costs below reflect the cost to generate one unit of
additional demand in that period plus the demand generated in future periods. IED Inc. had allocated an
advertising budget of $ for all six periods.
Each unit produced has the following requirements based on the type of product ailerons elevons, or
flaps and the plant at which it is produced. These requirements are summarized below. solve it using linear programming and explain every constraints.
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