28. A company produces two models of a product: Standard and Deluxe. The production cost of the...
Question:
28. A company produces two models of a product: Standard and Deluxe. The production cost of the standard model during normal working hours is Rs 400, while the deluxe model costs Rs 750. It is possible to produce both these models through overtime working at a unit cost of Rs 450 and Rs 820, respectively. Inventory carrying cost of a unit of standard model is Rs 6 per month while that for a deluxe unit is Rs 10. According to the present capacity each month, during the normal working time, a maximum of 300 units (both standard and deluxe combined) can be produced, while the overtime capacity is 200 units per month. Given the following demand projections, what production schedule should the management adopt so that the total demand may be met at the lowest cost?
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