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Linear Programming

1. A company must meet on time the following demands: quarter 1, 3000 units; quarter 2, 2000 units; quarter 3, 4000 units. Each quarter, up to 2700 units can be produced with regular-time labor, at a cost of $40 per unit. During each quarter, an unlimited number of units can be made with overtime labor, at a cost of $60 per unit. Of all units produced, 20% are unsuitable for sale and cannot be used for demand. Also, at the end of each quarter, 10% of all units on hand spoil and cannot be used to meet any future demands. After each quarterâ??s demand is satisfied and spoilage is accounted for, a cost of $15 per unit is assessed against the quarterâ??s ending inventory. Assume 1000 units are available initially.
a. Formulate this model
b. Solve the model you have formulated using Solver. Report the important decisions that the company must make. How much money will the solution cost the company?

Solution Summary

Formulate this model
Solve the model formulated using Solver.