EZ-Windows, Inc. manufacturers replacement windows for the home remodeling business. In January, the company produces 15,000 windows and ended the month with 9,000 windows in inventory. EZ-Windows’ management team would like to de- velop a production schedule for the next three moths. A smooth production schedule is obviously desirable because it maintains the current workforce and provides a sim- ilar month-to-month operation. However, given the sales forecasts, the production capacities, and the storage capabilities as shown in Table 2, the management team does not think a smooth production schedule with the same production quantity each month possible. The company’s cost accounting department estimates that increasing production by one window from one month to the next will increase total costs by $1.00 for each unit increase in the production level. In addition, decreasing production by one unit from one month to the next will increase total costs by $0.65 for each unit decrease in the production level. Ignoring production and inventory carrying costs, formulate a linear programming model that will minimize the cost of changing production levels while still satisfying the monthly sales forecasts.
1.8 EZ-Windows, Inc. manufacturers replacement windows for the home remodeling business. In January, the company produces 15,000 windows and ended the month with 9,000 windows in inventory. EZ-Windows’ management team would like to de- velop a production schedule for the next three moths. A smooth production schedule is obviously desirable because it maintains the current workforce and provides a sim- ilar month-to-month operation. However, given the sales forecasts, the production capacities, and the storage capabilities as shown in Table 2, the management team does not think a smooth production schedule with the same production quantity each month possible.
The company’s cost accounting department estimates that increasing production by one window from one month to the next will increase total costs by $1.00 for each
unit increase in the production level. In addition, decreasing production by one unit from one month to the next will increase total costs by $0.65 for each unit decrease in the production level. Ignoring production and inventory carrying costs, formulate a linear programming model that will minimize the cost of changing production levels while still satisfying the monthly sales forecasts.
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