Question
SealCo is an automobile manufacturer and at the beginning of April, SealCo wants to come up with a production plan to meet the following demands
SealCo is an automobile manufacturer and at the beginning of April, SealCo wants to come up with a production plan to meet the following demands for a car: April, 30 units; May, 30 units; June, 20 units. When SealCo cannot meet the demand for a specific month, it may be backlogged at a cost of $5/unit/month. All the backlogged demand must be met at most during June (at the end of the 3-months planning horizon), then a backlogging cost of 5(2) = $10 is incurred. SealCo's monthly production capacity and unit production cost during each month are given in table below. A holding cost of $20/unit is charged due to the inventory at the end of each month.
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