Question
LMNO Gaskets has seeks an optimal production plan for a product to meet demand over the upcoming three quarters. Demand in each of the three
LMNO Gaskets has seeks an optimal production plan for a product to meet demand over the upcoming three quarters. Demand in each of the three quarters and production, overtime, and subcontracting capacities are reported in the table below. The relevant costs are:
- Regular time production cost is $20/unit.
- Overtime production cost is $30/unit.
- Subcontracting cost is $34/unit.
- Inventory is held at a cost of $5/unit/quarter.
- Units may be backordered at a cost of $8/unit/quarter
| Production Resource | Demand in Quarter | Capacity | ||
|---|---|---|---|---|
| Q1 | Q2 | Q3 | ||
| Regular Time Q1 | 600 | |||
| Overtime Q1 | 300 | |||
| Subcontract Q1 | 650 | |||
| Regular Time Q2 | 600 | |||
| Overtime Q2 | 300 | |||
| Subcontract Q2 | 650 | |||
| Regular Time Q3 | 600 | |||
| Overtime Q3 | 300 | |||
| Subcontract Q3 | 650 | |||
| Demand in Quarter | 1100 | 1940 | 700 | |
What is the cost of the optimal production plan (Use EXCEL Solver)?
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Financial Intelligence For IT Professionals
Authors: Julie Bonner
1st Edition
103215294X, 9781032152943
