Acme Manufacturing makes a variety of household appliances at a single manufacturing facility. The expected demand for one of these appliances during the next four months is shown in the following table along with the expected production costs and the expected capacity for producing these items. Demand Production Cost Production Capacity MIN: Subject to: Inventory Month 1 Inventory Month 2 Acme estimates it costs $1.50 per month for each unit of this appliance carried in inventory (estimated by averaging the beginning and ending inventory levels each month). Currently, Acme has 120 units in inventory on hand for this product. To maintain a level workforce, the company wants to produce at least 400 units per month. The company also wants to maintain a safety stock of at least 50 units per month. Acme wants to determine how many of each appliance to manufacture during each of the next four months to meet the expected demand at the lowest possible total cost. (Let P, number of units to produce in monthi and I, - inventory held at the end of month i.) Inventory Month 3 Inventory Month 4 (a) Formulate an LP model for this problem to minimize total cost (in dollars). (Enter your answers for production as a comma- separated list of inequalities and/or equations.) Production Month 1 Production Month 2 1 410 $49.00 510 Production Month 3 Month Production Month 4 4, v 2 590 $45.00 510 3 300 $46.00 440 4 550 $47.00 560 (b) Create a spreadsheet model for this problem and solve it using Solver. What is the optimal solution? (P₂ PyPy Party lady la)-([ (c) How much money (in dollars) could Acme save if they were willing to drop the restriction about producing at least 400 units per month?
Acme Manufacturing makes a variety of household appliances at a single manufacturing facility. The expected demand for one of these appliances during the next four months is shown in the following table along with the expected production costs and the expected capacity for producing these items. Demand Production Cost Production Capacity MIN: Subject to: Inventory Month 1 Inventory Month 2 Acme estimates it costs $1.50 per month for each unit of this appliance carried in inventory (estimated by averaging the beginning and ending inventory levels each month). Currently, Acme has 120 units in inventory on hand for this product. To maintain a level workforce, the company wants to produce at least 400 units per month. The company also wants to maintain a safety stock of at least 50 units per month. Acme wants to determine how many of each appliance to manufacture during each of the next four months to meet the expected demand at the lowest possible total cost. (Let P, number of units to produce in monthi and I, - inventory held at the end of month i.) Inventory Month 3 Inventory Month 4 (a) Formulate an LP model for this problem to minimize total cost (in dollars). (Enter your answers for production as a comma- separated list of inequalities and/or equations.) Production Month 1 Production Month 2 1 410 $49.00 510 Production Month 3 Month Production Month 4 4, v 2 590 $45.00 510 3 300 $46.00 440 4 550 $47.00 560 (b) Create a spreadsheet model for this problem and solve it using Solver. What is the optimal solution? (P₂ PyPy Party lady la)-([ (c) How much money (in dollars) could Acme save if they were willing to drop the restriction about producing at least 400 units per month?
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...
Related questions
Question
Transcribed Image Text:Acme Manufacturing makes a variety of household appliances at a single manufacturing facility. The expected demand for one of
these appliances during the next four months is shown in the following table along with the expected production costs and the
expected capacity for producing these items.
Demand
Production Cost
Production Capacity
MIN:
Subject to:
Acme estimates it costs $1.50 per month for each unit of this appliance carried in inventory (estimated by averaging the
beginning and ending inventory levels each month). Currently, Acme has 120 units in inventory on hand for this product. To
maintain a level workforce, the company wants to produce at least 400 units per month. The company also wants to maintain a
safety stock of at least 50 units per month. Acme wants to determine how many of each appliance to manufacture during each of
the next four months to meet the expected demand at the lowest possible total cost. (Let P, number of units to produce in
monthi and I, inventory held at the end of month (.)
Inventory Month 1
(a) Formulate an LP model for this problem to minimize total cost (in dollars). (Enter your answers for production as a comma-
separated list of inequalities and/or equations.)
Inventory Month 2
Inventory Month 3
Inventory Month 4
Production Month 1
Production Month 2
Month
Production Month 3
1
2
410
590
$49.00 $45.00
510
510
Production Month 4
3
300
$46.00
440
4
550
$47.00
560
(b) Create a spreadsheet model for this problem and solve it using Solver. What is the optimal solution?
(c) How much money (in dollars) could Acme save if they were willing to drop the restriction about producing at least 400 units
per month?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 8 images
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.