You manage a production line that operates using a monthly production cycle. There are five different products that could be made this month. However, you only have 500 hours of line capacity, so you must be careful which products you select to make in the production cycle. Making a product incurs two types of setup costs: (1) a material “tear down” cost (measured in dollars) and (2) downtime for line preparation (measured in hours). Any quantity up to the forecasted monthly demand can be sold. Additional production details are given in the table below: Product 1 Product 2 Product 3 Product 4 Product 5 Monthly Demand 1000 units 1100 units 1700 units 1600 units 1500 units Revenue (per unit) $150 $175 $155 $200 $225 Production Cost (per unit) $60 $70 $60 $100 $110 Set Up Cost $10000 $15000 $25000 $10000 $5000 Set Up Time 25 hrs 15 hrs 0 hrs 10 hrs 30 hrs Production Time (per unit) .1 hrs .12 hrs .13 hrs .15 hrs .16 hrs Based on this information, design a monthly production schedule to maximize monthly profit. Your solution should identify which products to make and the quantities of each. (Assume the line is not currently set up to make any of these products; Set Optimality Gap to .1%)
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
You manage a production line that operates using a monthly production cycle. There are five different products that could be made this month. However, you only have 500 hours of line capacity, so you must be careful which products you select to make in the production cycle.
Making a product incurs two types of setup costs: (1) a material “tear down” cost (measured in dollars) and (2) downtime for line preparation (measured in hours). Any quantity up to the
|
|
Product 1 |
Product 2 |
Product 3 |
Product 4 |
Product 5 |
|
Monthly Demand |
1000 units |
1100 units |
1700 units |
1600 units |
1500 units |
|
Revenue (per unit) |
$150 |
$175 |
$155 |
$200 |
$225 |
|
Production Cost (per unit) |
$60 |
$70 |
$60 |
$100 |
$110 |
|
Set Up Cost |
$10000 |
$15000 |
$25000 |
$10000 |
$5000 |
|
Set Up Time |
25 hrs |
15 hrs |
0 hrs |
10 hrs |
30 hrs |
|
Production Time (per unit) |
.1 hrs |
.12 hrs |
.13 hrs |
.15 hrs |
.16 hrs |
- Based on this information, design a monthly production
schedule to maximize monthly profit. Your solution should identify which products to make and the quantities of each. (Assume the line is not currently set up to make any of these products; Set Optimality Gap to .1%)
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