A shoe company forecasts the following demands during the next six months: month 1200; month 2260; month 3240; month 4340; month 5190; month 6150. It costs $7 to produce a pair of shoes with regular-time labor (RT) and $11 with overtime labor (OT). During each month, regular production is limited to 200 pairs of shoes, and overtime production is limited to 100 pairs. It costs $1 per month to hold a pair of shoes in inventory. Formulate a balanced transportation problem to minimize the total cost of meeting the next six months of demand on time.

1) Assuming that demand must be met on time, determine optimal solution.

2) Assuming that late delivery is allowed with penalty cost $ 0.6/month, determine optimal solution.

3) Compare the results of 1) and 2).

-Transform problem into LP.

-If you possible, use Excel to solve it.