A firm wants to determine its production rate over the next twelve months. expected demand for its product is 30, 80, 90, 75, 80, 100, 95, 75, 200, 125, 130, 120 units for months 1 through 12 respectively. The product is perishable and thus cannot be stored from month to month. The loss per unit not sold is $8, and the penalty per unit short is $15. Because of the nature of the production process, the difference between production levels of two successive months cannot be more than 20. That is, if produce 50 in month 4, the production in month 5 can be between 30 and 70. Formulate this problem and solve to determine the optimal production schedule.

A firm wants to determine its production rate over the next twelve months. expected demand for its product is 30, 80, 90, 75, 80, 100, 95, 75, 200, 125, 130, 120 units for months 1 through 12 respectively. The product is perishable and thus cannot be stored from month to month. The loss per unit not sold is $8, and the penalty per unit short is $15. Because of the nature of the production process, the difference between production levels of two successive months cannot be more than 20. That is, if produce 50 in month 4, the production in month 5 can be between 30 and 70. Formulate this problem and solve to determine the optimal production schedule.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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