Metal Fabricators, Inc. manufactures gas grill tanks, Model # 1420, for four original equipment manufacturers (OEMs). Demand
Question:
Metal Fabricators, Inc. manufactures gas grill tanks, Model # 1420, for four original equipment manufacturers (OEMs). Demand is forecast to be as follows: Quarter 1 – 2,800 tanks, Quarter 2 – 3,400, Quarter 3 – 3,600, and Quarter 4 – 2,900. Due to a hedging program for sheet steel and increases in international tariffs, production cost per quarter vary as follows: Quarter 1 – $23.50 per tank, Quarter 2 – $28.00, Quarter 3 – $25.90, and Quarter 4 – $29.00. Due to production contracts with the OEMs, no shortages are allowed. Beginning inventory for Quarter 1 is 300 tanks. Because the tanks require a lot of cubic storage space, inventory holding costs are high. At the end of each quarter, inventory holding costs are $4.25 per tank. Formulate this as a linear optimization model but do not solve (see Supplement D).
Step by Step Answer:
Operations And Supply Chain Management
ISBN: 9780357131695
2nd Edition
Authors: David A. Collier, James R. Evans