Problem 3 (40 points): Production Inventory Planning. Table 3: Parameters for production and inventory related cost Parameters Product A Product B Production cost 15 20 Shipping Cost 3 4 Holding Cost 2 | 3 | Backorder cost 5 6 Unit $/item $/item $/item $/item Initial Inventory at t=0 Item Table 4: Monthly Demand and Available Resources Demand of Product A v, for Product A V, for Product B Month (i) 20 Demand of Product B 10 15 13 2 81 25 100 90 22 15 16 70 21 80 12 11 | | 2 | 3 | 75 Questions: 1) Formulate the aggregate production-Inventory Planning Model 2) Solve the problem for monthly production, inventory holding and backorders. 3) If demand for Product A is random with mean given in Table 4, i.e. 20, 25, ...., 19, and the standard deviation is 2 units per month. The demand for Product B is still deterministic as shown in Table 2. To ensure that monthly demand for Product A is always met with 60% confidence. Formulate the optimization problem and solve it in excel. Problem 3 (40 points): Production Inventory Planning. Table 3: Parameters for production and inventory related cost Parameters Product A Product B Production cost 15 20 Shipping Cost 3 4 Holding Cost 2 | 3 | Backorder cost 5 6 Unit $/item $/item $/item $/item Initial Inventory at t=0 Item Table 4: Monthly Demand and Available Resources Demand of Product A v, for Product A V, for Product B Month (i) 20 Demand of Product B 10 15 13 2 81 25 100 90 22 15 16 70 21 80 12 11 | | 2 | 3 | 75 Questions: 1) Formulate the aggregate production-Inventory Planning Model 2) Solve the problem for monthly production, inventory holding and backorders. 3) If demand for Product A is random with mean given in Table 4, i.e. 20, 25, ...., 19, and the standard deviation is 2 units per month. The demand for Product B is still deterministic as shown in Table 2. To ensure that monthly demand for Product A is always met with 60% confidence. Formulate the optimization problem and solve it in excel