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3. A company which produces a single product has definite orders for this product over the next six months as follows: 1 3 4 5 Month 2 Demand 350 680 475 590 460 6 390 The company ended the previous month (month 0) with an inventory of 200 units, and the previous month production level was 400 units. The company wishes to end this six-month planning period with an inventory of at least 50 units. It costs $3.50 per unit to increase the production level from one month to the next, and $6.00 per unit to decrease it. The cost of holding inventory from one month to the next is $4.80 per unit per month. No shortages are permitted. In each month, the company wants to produce an integer number of units. The company wishes to minimize the sum of production level change costs and inventory costs over the six-month planning horizon.

3. A company which produces a single product has definite orders for this product over the next six months as follows: 1 3 4 5 Month 2 Demand 350 680 475 590 460 6 390 The company ended the previous month (month 0) with an inventory of 200 units, and the previous month production level was 400 units. The company wishes to end this six-month planning period with an inventory of at least 50 units. It costs $3.50 per unit to increase the production level from one month to the next, and $6.00 per unit to decrease it. The cost of holding inventory from one month to the next is $4.80 per unit per month. No shortages are permitted. In each month, the company wants to produce an integer number of units. The company wishes to minimize the sum of production level change costs and inventory costs over the six-month planning horizon.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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3. A company which produces a single product has definite orders for this product over the next six months as follows: 1 2 3 4 5 6 Month Demand 350 680 475 590 460 390 The company ended the previous month (month 0) with an inventory of 200 units, and the previous month production level was 400 units. The company wishes to end this six-month planning period with an inventory of at least 50 units. It costs $3.50 per unit to increase the production level from one month to the next, and $6.00 per unit to decrease it. The cost of holding inventory from one month to the next is $4.80 per unit per month. No shortages are permitted. In each month. the company wants to produce an integer number of units. The company wishes to minimize the sum of production level change costs and inventory costs over the six-month planning horizon.
Transcribed Image Text:3. A company which produces a single product has definite orders for this product over the next six months as follows: 1 2 3 4 5 6 Month Demand 350 680 475 590 460 390 The company ended the previous month (month 0) with an inventory of 200 units, and the previous month production level was 400 units. The company wishes to end this six-month planning period with an inventory of at least 50 units. It costs $3.50 per unit to increase the production level from one month to the next, and $6.00 per unit to decrease it. The cost of holding inventory from one month to the next is $4.80 per unit per month. No shortages are permitted. In each month. the company wants to produce an integer number of units. The company wishes to minimize the sum of production level change costs and inventory costs over the six-month planning horizon.
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