Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

EZ-Windows, Inc., manufactures replacement windows for the home remodeling business. In January, the company produced 15,000 windows and ended the month with 10,000 windows in

EZ-Windows, Inc., manufactures replacement windows for the home remodeling business. In January, the company produced 15,000 windows and ended the month with 10,000 windows in inventory. EZ-Windows management team would like to develop a production schedule for the next three months. A smooth production schedule is obviously desirable because it maintains the current workforce and provides a similar month-to-month operation. However, given the sales forecasts, the production capacities, and the storage capabilities as shown, the management team does not think a smooth production schedule with the same production quantity each month is possible.

February March April
Sales forecast 15,000 15,500 20,500
Production capacity 13,000 15,000 17,000
Storage capacity 6,000 6,000 6,000

The companys cost accounting department estimates that increasing production by one window from one month to the next will increase total costs by $1.00 for each unit increase in the production level. In addition, decreasing production by one unit from one month to the next will increase total costs by $0.65 for each unit decrease in the production level. Ignoring production and inventory carrying costs, formulate and solve a linear programming model that will minimize the cost of changing production levels while still satisfying the monthly sales forecasts. If required, round your answers to two decimal places. If an amount is zero, enter "0".

Let:

F = number of windows manufactured in February

M = number of windows manufactured in March

A = number of windows manufactured in April

Im = increase in production level necessary during month m

Dm = decrease in production level necessary during month m

sm = ending inventory in month m

Min I1 + I2 + I3 + .65D1 + .65D2 + .65D3
s.t.
(1) F - s1 = 5000 February Demand
(2) s1 + M - s2 = 15500 March Demand
(3) s2 + A - s3 = 20500 April Demand
(4) F - I1 + D1 = 15000 Change in February Production
(5) M - F - I2 + D2 = 0 Change in March Production
(6) A - M - I3 + D3 = 0 Change in April Production
(7) F 13000 February Production Capacity
(8) M 15000 March Production Capacity
(9) A 17000 April Production Capacity
(10) s1 6000 February Storage Capacity
(11) s2 6000 March Storage Capacity
(12) s3 6000 April Storage Capacity

If required, round your answers to the nearest dollar.

Cost: $ ____

If required, round your answers to the nearest whole number. If an amount is zero, enter "0"

February March April
Production Level 15000 15000
Increase in Production 0 0
Decrease in Production 0 0
Ending Inventory 6000 5500 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions