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Master Production Schedule (MPS) An electronic widget manufacturer is about to plan its production of a high selling widget NOX12K678P. The demand for the widget
Master Production Schedule (MPS) An electronic widget manufacturer is about to plan its production of a high selling widget NOX12K678P. The demand for the widget for the next 10 weeks has been estimated as follows: Week Demand 1 200 2 180 3 220 4 170 5 160 6 170 7 180 8 190 9 6 Coo 220 10 210 TOTAL 1900 As soon as a widget is produced it is sent to the finished goods (FG) inventory. If it is shipped from the FG inventory the same week it is produced the manufacturer assumes no inventory holding cost for the widget. However, if a widget is not shipped from the inventory the same week it is produced, a holding cost of $1 per widget is incurred for every week in inventory. As of now (end of week 0), there are 300 widgets in the FG inventory. The setup cost to run a batch is assumed to be $1.200. The manufacturer could make all widgets in one week, so capacity is not an issue. Note that setup costs are incurred for the first batch every week independently of whether the same unit was produced in the last run of the previous week. First, formulate a Fixed Order (EOQ) Planning-spreadsheet to find the production plan. Then, formulate a MILP-spreadsheet to find the optimal production plan. Compare the results. Master Production Schedule (MPS) An electronic widget manufacturer is about to plan its production of a high selling widget NOX12K678P. The demand for the widget for the next 10 weeks has been estimated as follows: Week Demand 1 200 2 180 3 220 4 170 5 160 6 170 7 180 8 190 9 6 Coo 220 10 210 TOTAL 1900 As soon as a widget is produced it is sent to the finished goods (FG) inventory. If it is shipped from the FG inventory the same week it is produced the manufacturer assumes no inventory holding cost for the widget. However, if a widget is not shipped from the inventory the same week it is produced, a holding cost of $1 per widget is incurred for every week in inventory. As of now (end of week 0), there are 300 widgets in the FG inventory. The setup cost to run a batch is assumed to be $1.200. The manufacturer could make all widgets in one week, so capacity is not an issue. Note that setup costs are incurred for the first batch every week independently of whether the same unit was produced in the last run of the previous week. First, formulate a Fixed Order (EOQ) Planning-spreadsheet to find the production plan. Then, formulate a MILP-spreadsheet to find the optimal production plan. Compare the results
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