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The ABC Company has two manufacturing plants on opposite sides of India. Each of these plants produces the same two products and then sels them
The ABC Company has two manufacturing plants on opposite sides of India. Each of these plants
produces the same two products and then sels them to wholesalers within its half of the country. The
orders from wholesalers have already been received for the next months February and March where
the number of units requested are shown below The compary is not abligated to completely fill these
orders but will do sa if it can without decreasing its profits
Each plant has production days available in February and production days available in March to
produce and ship these products. Inventories are depleted at the end of January, but each plant has
enough inventary capacity to hold bath the two products if an encess amount is produced in February for
sale in March. In either plant, the cost of halding imentory in this way is $ per unit of product and $
per unit of Praduct
Each plant has the same two production processes, each of which can be used to produce either of the
two praducts. The production cast per unit produced of each praduct is shown below for each process in
each plant.
Name:
Roll No
The production rate far each product number of units produced per day devoted to that product also is
given for each process in each plant.
The net sales revenue selling price minus normal shipping costs the compary receives when a plant sells
the products to its own custamers to wholesalers in its half of the country is $ per unit af Product
and $ per unit of Product However, it is also possible and occasionally desirable for a plant to make
a shipment to the other half of the country to help fill the sales of the other plant. When this happens, an
eatra shipping cost of $ per unit af praduct and $ per unit of Praduct is incurred.
The manager Mr Ances P M who happens to be an IIMX graduate and also the Chief Technology
officer, needs to determine how much of each product shauld be produced by each production process
in each plant during each month, as well as haw much each plant should sell each product in each manth
and how much each plant should ship of each product in each month to the other plant's customers. The
objective is to determine the optimal plan that wauld maximize the total prafit tatal net sales revenue
minus the sum of the production costs, inventory costs, and extra shipping costs Formulate this
aggregate production planning problem as a transportation problem Transportation table is NECESSARY
and SUFFICIENT
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