A company wants to plan production for the ensuing year so as to minimize the combined cost of production and inventory storage. In each quarter of the year, demand is anticipated to be 65, 80, 135 and 75 respectively. The product can be manufactured during regular time at a cost of Php 16 per unit produced, or during overtime at a cost of Php 20 per unit. The given table below shows data pertinent to production capacities. The cost of carrying one unit in inventory per quarter is Php 2. The inventory level at the beginning of the first quarter is zero.
A company wants to plan production for the ensuing year so as to minimize the combined cost of production and inventory storage. In each quarter of the year, demand is anticipated to be 65, 80, 135 and 75 respectively. The product can be manufactured during regular time at a cost of Php 16 per unit produced, or during overtime at a cost of Php 20 per unit. The given table below shows data pertinent to production capacities. The cost of carrying one unit in inventory per quarter is Php 2. The inventory level at the beginning of the first quarter is zero.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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A company wants to plan production for the ensuing year so as to minimize the
combined cost of production and inventory storage. In each quarter of the year, demand is
anticipated to be 65, 80, 135 and 75 respectively. The product can be manufactured during
regular time at a cost of Php 16 per unit produced, or during overtime at a cost of Php 20 per
unit. The given table below shows data pertinent to production capacities. The cost of carrying
one unit in inventory per quarter is Php 2. The inventory level at the beginning of the first
quarter is zero.
Transcribed Image Text:Capacities (units)
Quarterly
Demand
Quarter
Regular Time
Overtime
80
90
1
10
65
80
135
75
2
3
10
95
20
4
70
10
Formulate and solve this problem as an LP model so as to minimize the production
plus storage costs for the entire year.
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