Question

Linear programming

A production & Inventory Problem

A company produces refrigerators, stoves, and dishwashers.

During thecoming year, sales are expected are:

                                                                   QUARTER
          PRODUCT                          1           2                3            4                   

          Refrigerators               1500     1000.      1500      1500

          Stoves                          1000     2000        2000      1200

          Dishwashers               1200      1500      1500       2500

•The company needs a production schedule that meets the demand requirements.

•

•The inventory level for each product must be at least 150 units at the end of each quarter.

•

•There is no inventory of any product at the start of the first quarter.

•There are 21,000 hours of production time are available for each quarter.

•

•A refrigerator requires 3 hours, a stove 5 hours, and a dishwasher 4 hours ofproduction time.

•

•Refrigerators cannot be manufactured in the fourth quarter because the company plans to modify tooling for a new product line.

•

•Each item left in inventory at the end of a quarter incurs aholding cost of $5.

The company wants to plan its production schedule over the year in such a way that meets the quarterly demands and minimizes the total inventory cost.

Answer 1