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An automotive manufacturing company is planning its manufacturing and stock for the next four months. The table below includes the demand and the variable manufacturing
An automotive manufacturing company is planning its manufacturing and stock for the next four months. The table below includes the demand and the variable manufacturing cost for each month. Month 2 3 Production demand (units) 100 140 210 180 Variable cost ($/unit) 15 12 10 14 The setup cost for production is $200. In addition, the company can stock just enough supply to meet each month's demand, or it can overstock to meet the demand for two or more successive and consecutive months. In the latter case, a holding cost of $1.20 is charged per overstocked unit per month. The company wants to develop a purchasing plan that will minimize the total costs of manufacturing and holding the item in stock. Formulate the problem as a network model in order to reach the company objective
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