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XYZ Company would like to determine a production schedule for a new product A. Because of differences in parts availability and spare production capacity,

XYZ Company would like to determine a production schedule for a new product A. Because of differences in

XYZ Company would like to determine a production schedule for a new product A. Because of differences in parts availability and spare production capacity, the cost of producing the machines will vary from month to month. These costs and other data are shown below. The holding cost for each unsold product still in inventory at the end of the month is $3. Comapny policy dictates that the maximum number of products allowed in inventory at the end of any month is 4. Determine an optimal 4 month production schedule for the XYZ new product. Month 1 2 3 4 Production cost per unit $25 10 15 30 Max production level 5 5 5 5 Demand 3 2 4 4

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