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2. Arkansas Pacific is a company which operates a sawmill that produces boards from different types of lumber. For each of the next 3 months,
2. Arkansas Pacific is a company which operates a sawmill that produces boards from different types of lumber. For each of the next 3 months, Arkansas Pacific must produce two products (named Product 1 and Product 2) in sufficient quantity to meet contracted sales. The same production facility is used for the production of two products and each unit of both products requires the same amount of production capacity. The available production and storage facilities are changing month by month, so the production capacities, unit production costs, and unit storage costs vary by month and related data is shown in Table 1 below for each month. Thus, the company may overproduce one or both products in some months and store them until needed. The second column of the table gives the maximum number of units of the two products combined that can be produced on Regular Time (RT) and on Overtime (OT). For each of the two products, the subsequent columns give (1) the number of units needed for the contracted sales, (2) the cost (in thousands of \$) per unit produced on Regular Time, (3) the cost (in thousands of \$) per unit produced on Overtime, and (4) the cost (in thousands of \$) of storing each extra unit that is held over into the next month. In the table, the numbers for the two products are separated by a slash /, with the number for Product 1 given on the left and the number for Product 2 given on the right. Table 1. Data for Arkansas Pacific problem. The production manager wants a schedule developed for the number of units of each of the two products to be produced on Regular Time and (if Regular Time production capacity is used up) on Overtime in each of the three months. The objective is to minimize the total of the production and storage costs while meeting the contracted sales for each month. There is no initial inventory, and no final inventory is desired after the three months. Formulate this problem as a transportation problem by constructing the appropriate transportation table (with values in the table). Hint: Do not forget to create a balanced transportation
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