Share
Explore BrainMass

Widget producer: Production Plan that minimizes cost using t

Widget producer develops 4 month aggregate plan. Demand and capacity (in units) are forecast below

CAPACITY SOURCE Month 1 Month 2 Month 3 Month 4
Labor
Regular time 235 255 290 300
Overtime 20 24 26 24
Subcontract 12 15 15 17
Demand 255 294 321 301

The cost of producing each widget is $985 on regular time, $1310 on overtime, and $1500 subcontract. Carrying cost is $100 per unit per month. There is no beginning or ending inventory in stock and backorders are not permitted. Set up production plan that minimizes cost using transportation method.

Solution Preview

Please see the attached file - you can see the set up in tools > solver

Capacity Labour Source Month 1 Month 2 Month 3 Month 4 Cost
Regular Time 235 255 290 300 $985.00
Over Time 20 24 26 24 $1,310.00
Subcontract 12 15 15 17 $1,500.00
Demand 255 294 321 301
Carrying Cost per unit per month $100.00

Decision Variables Month 1 Month 2 Month 3 Month 4
Regular Time 235.00 255.00 290.00 300.00
Over ...

$2.19