Question
A customer requires during the next four months 50, 65, 100, and 70 units of a commodity respectively. Production costs are $5, $8, $4, and
A customer requires during the next four months 50, 65, 100, and 70 units of a commodity respectively. Production costs are $5, $8, $4, and $7 per unit during these months. Storage cost per unit is $2 and is calculated on the ending inventory. What is the minimum net cost (inventory + production) incurred in meeting the demands of the next four months?
I1 Inventory at the end of month 1
m1 Number of units produced in month 1
I1 = ? + m1 − ?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To find the minimum net cost incurred in meeting the demands over the next four months well first calculate the production costs and inventory costs f...
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Step: 2
Step: 3
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Data Analysis And Decision Making
Authors: Christian Albright, Wayne Winston, Christopher Zappe
4th Edition
538476125, 978-0538476126
