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A company wants to plan production for the ensuing year to minimize the combined cost of production and inventory costs.  In each quarter of the year, demand is anticipated to be 130, 160, 250, and 150 units, respectively.  The plant can produce a maximum of 200 units each quarter.  The product can be manufactured at a cost of $15 per unit during the first quarter, however the manufacturing cost is expected to rise by $1 per quarter.  Excess production can be stored from one quarter to the next at a cost of $1.50 per unit, but the storage facility can hold a maximum of 60 units.  How should the production be scheduled so as to minimize the total costs?

A company wants to plan production for the ensuing year to minimize the combined cost of production and inventory costs.  In each quarter of the year, demand is anticipated to be 130, 160, 250, and 150 units, respectively.  The plant can produce a maximum of 200 units each quarter.  The product can be manufactured at a cost of $15 per unit during the first quarter, however the manufacturing cost is expected to rise by $1 per quarter.  Excess production can be stored from one quarter to the next at a cost of $1.50 per unit, but the storage facility can hold a maximum of 60 units.  How should the production be scheduled so as to minimize the total costs?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter6: Optimization Models With Integer Variables
Section: Chapter Questions
Problem 49P
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A company wants to plan production for the ensuing year to minimize the combined cost of production and inventory costs.  In each quarter of the year, demand is anticipated to be 130, 160, 250, and 150 units, respectively.  The plant can produce a maximum of 200 units each quarter.  The product can be manufactured at a cost of $15 per unit during the first quarter, however the manufacturing cost is expected to rise by $1 per quarter.  Excess production can be stored from one quarter to the next at a cost of $1.50 per unit, but the storage facility can hold a maximum of 60 units.  How should the production be scheduled so as to minimize the total costs? 

 

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ISBN:
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