Question: You need to construct an optimization model to create a montly production plan, where the objective is to minimize the total cost including production, subcontracting,
You need to construct an optimization model to create a montly production plan, where the objective is to minimize the total cost including production, subcontracting, and inventory holding costs. According to the company policy, there is no backorder, no production lead time, or no setup costs. Hiring and firing are not allowed, i.e. the facility is working with a constant workforce. However, subcontracting is allowed and there is a unit subcontracting cost per bike. Consider that there is a finite maximum monthly production capacity which is constant over the planning horizon. The capacity of the warehouse is also finite, that is there is a limitation on the maximum inventory held in the warehouse. The number of bicycles one worker can produce a day is also given. The number of workdays in each of the 12 months is known.( clearly explain your parameters, decision variables, objective function and constraints with all necessary indices.)
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