Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Transcribed Image Text:Company ZWZ manufactures three products in a serial system; Product XA is manufactured in Stage 1, Product XB in Stage 2, and XC in Stage 3. Product XB has a sales potential in the market; hence, some of it can be sold at the end of Stage 2, and
the remaining can be moved to Stage 3. The third stage produces Product XC, and then delivers it to customers. Two units of Product XA produced in Stage 1 are required for each unit of Product XB in Stage 2. In addition, four units of Product XB
produced in Stage 2 are required for each unit of Product XC in Stage 3.
Stage 1 can only use regular time; however, Stage 2 has the options of using regular time and overtime in manufacturing. On the other hand, Stage 3 has only one alternative, which is subcontracting. The pertinent data are provided below:
Stage 2
Stage 1
11
No overtime
No
subcontracting
No sales
0.07
Unit regular time cost (TL)
Unit overtime cost (TL)
Unit subcontracting cost (TL)
Unit selling price (TL)
Unit processing time (hrs)
Regular time capacity (hrs)
Overtime capacity (hrs)
Minimum subcontracting
volume (units)
Maximum sales volume (units)
320
No overtime
No
subcontracting
No sales
Formulate the production planning problem of the company as a three-stage model (Define the decision variables explicitly!).
Hint: Drawing the system first will help you in modelling.
12
18
No
subcontracting
25
0.09
160
80
No
subcontracting
3300
Stage 3
No regular time
No overtime
22
30
No regular time
No overtime
100
4500
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