motorcycle manufacturer is determining its production schedule for the next 6 months. The cost of manufacturing a
Question:
motorcycle manufacturer is determining its production schedule for the next 6 months. The cost of manufacturing a motorcycle during each month is provided on the worksheet Q7. At the end of each month, a holding cost of $200 per motorcycle left in inventory is incurred. No more than 50 motorcycles can be stored in inventory at any point in time. Monthly demands for motorcycles are also given on the worksheet. Assume that at the beginning of the first month, 25 completed motorcycles are in inventory. Also, this company can produce up to 200 motorcycles per month. Finally, each unit on hand at the end of month 6 (after demand is met) could be sold for $1000. Determine a cost-minimizing production schedule that meets all demands on time by Solver on excel.
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | |
Unit production costs | $750 | $755 | $785 | $810 | $815 | $825 |
Unit holding cost per month | ||||||
Monthly production capacity | ||||||
Inventory storage capacity | ||||||
Initial inventory of Month 1 | ||||||
Salvage value of each leftover unit (end of month 6) | ||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | |
Production level during month | ||||||
Onhand Inventory after Production | ||||||
Demand during month | 180 | 205 | 195 | 196 | 199 | 208 |
Ending Inventory | ||||||
Total monthly production cost | ||||||
Total monthly inventory holding cost | ||||||
Total monthly net cost | ||||||