An engineering plant has developed the accompanying supply, demand, cost and inventory data. The engineering plant has a constant workforce and meets all its demands. Allocate production capacity to satisfy demand at a minimum cost. What is the cost of this plan? (Assume that back ordering is not a viable alternative for the plant) Demand forecast Period Demand (Unit) 1 650 2 700 3 900 Supply Capacity available (units) Period Regular time Overtime Subcontract 1 350 100 250 2 450 100 250 3 500 100 250 Other Data Initial Inventory 100 units Regular-time cost per unit R 50 Overtime cost per unit R 65 Subcontract cost per unit R 80 Carrying cost per unit per period R 1 Back order cost per unit per period R 4

An engineering plant has developed the accompanying supply, demand, cost and inventory data. The engineering plant has a constant workforce and meets all its demands. Allocate production capacity to satisfy demand at a minimum cost. What is the cost of this plan? (Assume that back ordering is not a viable alternative for the plant) Demand forecast Period Demand (Unit) 1 650 2 700 3 900 Supply Capacity available (units) Period Regular time Overtime Subcontract 1 350 100 250 2 450 100 250 3 500 100 250 Other Data Initial Inventory 100 units Regular-time cost per unit R 50 Overtime cost per unit R 65 Subcontract cost per unit R 80 Carrying cost per unit per period R 1 Back order cost per unit per period R 4

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter12: Queueing Models

Section: Chapter Questions

Problem 59P

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Period	Regular time	Overtime	Subcontract
1	350	100	250
2	450	100	250
3	500	100	250

Initial Inventory	100 units
Regular-time cost per unit	R 50
Overtime cost per unit	R 65
Subcontract cost per unit	R 80
Carrying cost per unit per period	R 1
Back order cost per unit per period	R 4