During the next four quarters, Dorian Auto must meet(on time) the following demands for cars: quarter 1—4,000;quarter 2—2,000; quarter 3—5,000; quarter 4—1,000. Atthe beginning of quarter 1, there are 300 autos in stock, andthe company has the capacity to produce at most 3,000 carsper quarter. At the beginning of each quarter, the companycan change production capacity by one car. It costs $100 toincrease quarterly production capacity. It costs $50 perquarter to maintain one car of production capacity (even ifit is unused during the current quarter). The variable cost ofproducing a car is $2,000. A holding cost of $150 per car isassessed against each quarter’s ending inventory. It isrequired that at the end of quarter 4, plant capacity must beat least 4,000 cars. Formulate an LP to minimize the totalcost incurred during the next four quarters.

During the next four quarters, Dorian Auto must meet(on time) the following demands for cars: quarter 1—4,000;quarter 2—2,000; quarter 3—5,000; quarter 4—1,000. Atthe beginning of quarter 1, there are 300 autos in stock, andthe company has the capacity to produce at most 3,000 carsper quarter. At the beginning of each quarter, the companycan change production capacity by one car. It costs $100 toincrease quarterly production capacity. It costs $50 perquarter to maintain one car of production capacity (even ifit is unused during the current quarter). The variable cost ofproducing a car is $2,000. A holding cost of $150 per car isassessed against each quarter’s ending inventory. It isrequired that at the end of quarter 4, plant capacity must beat least 4,000 cars. Formulate an LP to minimize the totalcost incurred during the next four quarters.

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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