Alan Industries is expanding its product line to include three new products: A, B, and C. These are to be produced on the same production equipment, and the objective is to meet the demands for the three products using overtime where necessary. The demand forecast for the next four months, in hours required to make each product, is Product April May June July A 800 600 800 1,200 B 600 700 900 1,100 C 700 500 700 850 Because the products deteriorate rapidly, there is a high loss in quality and, consequently, a high carrying cost when a product is made and carried in inventory to meet future demand. Each hour’s production carried into future months costs $3 per production hour for A, $4 for Model B, and $5 for Model C.

Production can take place either during regular working hours or during overtime. Regular time is paid at $4 when working on A, $5 for B, and $6 for C. The overtime premium is 50 percent of the regular time cost per hour.

The number of production hours available for regular time and overtime is April May June July Regular time 1,500 1,300 1,800 2,000 Overtime 700 650 900 1,000 Set up the problem in a spreadsheet and find an optimal solution using the Excel Solver. Supplement 19S describes how to use the Excel Solver.

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