During the next 2 months, General Cars must meet (on time) the following demands for trucks and
Question:
During the next 2 months, General Cars must meet (on time) the following demands for trucks and cars: month 1, 400 trucks and 800 cars; month 2, 300 trucks and 300 cars. During each month, at most 1000 vehicles can be produced. Each truck uses 2 tons of steel, and each car uses 1 ton of steel. During month 1, steel costs
$400 per ton; during month 2, steel costs $600 per ton.
At most 2500 tons of steel can be purchased each month. (Steel can be used only during the month in which it is purchased.) At the beginning of month 1, 100 trucks and 200 cars are in the inventory. At the end of each month, a holding cost of $150 per vehicle is assessed. Each car gets 20 mpg, and each truck gets 10 mpg. During each month, the vehicles produced by the company must average at least 16 mpg.
a. Determine how to meet the demand and mileage requirements at minimum total cost.
b. Check how sensitive the total cost is to the 16-mpg requirement by using SolverTable. Specifically, let this requirement vary from 14 mpg to 18 mpg in increments of 0.25 mpg, and write a short report of your results. In your report, explain intuitively what happens when the requirement is greater than 17 mpg.
Step by Step Answer:
Practical Management Science, Revised
ISBN: 9781118373439
3rd Edition
Authors: Wayne L Winston, S. Christian Albright