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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
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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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.
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