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CASE: PERFORMANCE LAWN EQUIPMENT Elizabeth Burke wants to develop a model to more effec - tively plan production for the next year. Currently, PLE has

CASE: PERFORMANCE LAWN EQUIPMENT
Elizabeth Burke wants to develop a model to more effec-tively plan production for the next year. Currently, PLE
has a planned capacity of producing 9,100 mowers each
month, which is approximately the average monthly
demand over the previous year. However, looking at the
unit sales figures for the previous year, she observed that
the demand for mowers has a seasonal fluctuation, so with
this level production strategy, there is overproduction in
some months, resulting in excess inventory buildup, and
underproduction in others, which may result in lost sales
during peak demand periods.
Ms. Burke explained that she could change the pro-duction rate by using planned overtime or undertime (pro-ducing more or less than the average monthly demand),
but this incurs additional costs, although it may offset the
cost of lost sales or of maintaining excess inventory. Con-sequently, she believes that the company can save a signif-icant amount of money by optimizing the production plan.
Ms. Burke saw a presentation at a conference about a
similar model that another company used but didnt fully
understand the approach. The PowerPoint notes didnt
have all the details, but they did explain the variables and
the types of constraints used in the model. She thought
they would be helpful to you in implementing an optimiza-tion model. Here are the highlights from the presentation:
Variables:
Xt =planned production in period t. Month NA SA Eur Pac China World
Jan-1460000571130911045074662
Feb-1477184611176791111096585
Mar-14778856582275910680102369
Apr-14861907782796612370116171
May-14961178862789513130126210
Jun-14971438823056611760129768
Jul-14847578482944413590116409
Aug-14798047352836412380110141
Sep-1464800657283931215095065
Oct-1459307595244441154085500
Nov-1452157553180001262071972
Dec-1445049462124531386059349
Jan-1558627553127781443073401
Feb-1576200615182141515096545
Mar-15828716582388913730108791
Apr-15849047842945514420116584
May-15931008462946412150124625
Jun-15930008382741413330122585
Jul-15830487632736814150112594
Aug-15748546942732112960104164
Sep-1560769625294441402092241
Oct-1555619610237741468081470
Nov-1548155571173081351067386
Dec-1542647512129411389057489
Jan-1657885537109621509070892
Feb-1677647595152731402094917
Mar-16818456592055615240104583
Apr-16860957562678615740115211
May-16917768782482814680118949
Jun-161006808252473715600127801
Jul-16861907562482814410113216
Aug-1671887714251791545099325
Sep-1660000651245451667086863
Oct-1655566643192861698077193
Nov-1650857619152731810068558
Dec-164259654891071731053982
Jan-175809558185711887069135
Feb-1775566614131581845091182
Mar-17802866221965519230102486
Apr-1785140727251791981125113027
May-1790093826231031810142115832
Jun-1795472783242861942226122482
Jul-1787308681247371961230114686
Aug-1774476646266072000122103729
Sep-17616986252298220755687381
Oct-175723

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