EXAMPLE 3.7-6 (Production Scheduling Problem) A company has a manufacturing plant which has the following regular production capacity during a quarter. Additional capacity can be obtained by the use of overtime but it increases the production cost. The forecast demand for the following quarter is also given below. The company starts with an initial inventory from the past quarter and requires a final inventory at the end of the quarter Items which are produced but not immediately used can be stored with a storage charge. Data is given in the table below: TABLE 3.181 Production capacity Forecast demand Month Regular Overtime Month Demand Jan. 200 14 Jan. 200 Feb 190 38 Feb. 750 March 210 42 March 250 April 200 10 April 250 Regular production cost 10 per unit Overtime production cost 14 per unit Initial inventory 100 units Final inventory 125 units Storage cost on items produced on regular basis - 10% per unit per month Storage cost on items produced on overtime basis - 14.3% per unit per month f35 Determine the production schedule in order to minimize the total cost of production and storage