A company produces a single type of product. The product sells for $9 per unit. The customer demands must be met on time. Monthly demands f the product, production and holding costs, and production capacities are shown in the table below. Demand Holding cost Production cost Production capacity Month (units) (S/unit/month) (S/unit) (units) М1 55 0.1 1.5 85 M2 75 0.18 1.6 85 M3 120 0.28 1.8 110 At the beginning of month 1, the company has 7 units of the product in inventory. For the decision variables, assume that t shows the month (1, 2 3), xt is the quantity produced in month t, It is the inventory left over at the end of month t. The company wants at least 5 units in inventory at the end of the planning horizon. We would like to minimize the total cost during three months (M1, M2, M3) for this problem using an integer program

Practical Management Science
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Chapter2: Introduction To Spreadsheet Modeling
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 (Objective & Objective Function)

(M2 capacity)

 (M1 inventory balance)

(M3 inventory balance)

(Ending inventory requirement)

A company produces a single type of product. The product sells for $9 per unit. The customer demands must be met on time. Monthly demands for
the product, production and holding costs, and production capacities are shown in the table below.
Demand Holding cost Production cost Production capacity
Month (units) (S/unit/month)
(S/unit)
(units)
М1
55
0.1
1.5
85
M2
75
0.18
1.6
85
M3
120
0.28
1.8
110
At the beginning of month 1, the company has 7 units of the product in inventory. For the decision variables, assume that t shows the month (1, 2,
3), xt is the quantity produced in month t, It is the inventory left over at the end of month t. The company wants at least 5 units in inventory at the
end of the planning horizon. We would like to minimize the total cost during three months (M1, M2, M3) for this problem using an integer program.
Transcribed Image Text:A company produces a single type of product. The product sells for $9 per unit. The customer demands must be met on time. Monthly demands for the product, production and holding costs, and production capacities are shown in the table below. Demand Holding cost Production cost Production capacity Month (units) (S/unit/month) (S/unit) (units) М1 55 0.1 1.5 85 M2 75 0.18 1.6 85 M3 120 0.28 1.8 110 At the beginning of month 1, the company has 7 units of the product in inventory. For the decision variables, assume that t shows the month (1, 2, 3), xt is the quantity produced in month t, It is the inventory left over at the end of month t. The company wants at least 5 units in inventory at the end of the planning horizon. We would like to minimize the total cost during three months (M1, M2, M3) for this problem using an integer program.
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