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QUESTION:

The demand for an item over the next four quarters is 500, 650, 750 and 700 units, respectively. Production costs are $ 50, $80, $ 40, $70 per unit during these quarters. The supplier can provide no more than 1000 units in any one quarter. A storage cost of $ 20 is incurred per unit per quarter. In addition, the maximum number of units that can be held over from one quarter to the next cannot exceed 600. It is estimated that each unit on hand at the end of fourth quarter could be sold for $ 75.

a.) What is the optimal result?

b.) What is the amount of items produced in the first, second , third, fourth quarter?

c.) What is the amount of items stored from quarter 3 to quarter 4?

d.) What is the amount of items stored from quarter 1 to quarter 2?