A manufacturer provides specialized microchips. During the

next 3 months, its sales, costs, and available time are

Month 1 Month 2 Month 3

Chips required 1000 2500 2200 Cost regular time ($/chip) 100 100 120

Cost overtime ($/chip) 110 120 130

Regular operation time (hr) 2400 2400 2400

Overtime (hr) 720 720 720

There are no chips in stock at the beginning of the first month. It takes 1.5 hr of production time to produce a chip and costs $5 to store a chip from one month to the next. Determine a production schedule that meets the demand requirements, does not exceed the monthly production time limitations, and minimizes cost. Note that no chips should be in stock at the end of the 3 months