Question: Read the following case and answer the question ( s ) that follow: A company produces a certain product and has the capacity to produce
Read the following case and answer the questions that follow:
A company produces a certain product and has the capacity to produce units per month in
regular time, and an additional units per month in overtime. The production cost of the
product varies by month due to changes in the material costs over time. The quantities of the
product to be delivered over the next six months have already been set. The delivery
requirements and production costs are given in the following table:
It is possible that the units produced in a month exceeds the delivery requirement. In such a
case, the unsold units are then carried in stock to the following month. The cost of carrying
an unsold unit in stock is R per unit per month.
At the beginning of month there are units in stock and the company does not want to
have any unsold units at the end of month The company must determine the number of
units of the product to produce in regular time and in overtime each month to meet the
delivery requirement at minimum cost.
a Define the decision variables that will be needed to formulate a linear programming LP
model for this problem.
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b Formulate the Linear Programming LP model that represents this problem. All excel
tabs are to be shown
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c Solve the LP model using SOLVER. All excel tabs and solver screens are to be shown
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d Interpret your SOLVER solution within the context of the original business problem
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