Question
A local bakery is planning the expansion of its bread-making capacity for the next 5 months. Currently, it can make 5000 loaves per month, but
A local bakery is planning the expansion of its bread-making capacity for the next 5 months. Currently, it can make 5000 loaves per month, but it forecasts its monthly demands to be as given in table
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | |
Demand | 5500 | 6500 | 8000 | 8500 | 9500 |
It can increase its current capacity by installing ovens of three di erent sizes. Each has a one-time
purchase cost and a monthly usage cost as given below, and only one oven of each size is available. Note that an oven can be purchased in any month but once an oven is purchased, the monthly usage cost is incurred regardless of the extent to which the oven is in use.
Oven | Monthly Capacity | Purchase Cost | Monthly Usage Cost |
Small | 1000 | $300 | $75 |
Medium | 2000 | $500 | $100 |
Large | 3500 | $1000 | $125 |
Formulate and solve an IP that determines when (and which) an oven must be bought, if the intention is to minimize cost
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started