Principles Of Operations Management
Principles Of Operations Management
11th Edition
ISBN: 9780135173930
Author: RENDER, Barry, HEIZER, Jay, Munson, Chuck
Publisher: Pearson,
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Chapter 13, Problem 16P
Summary Introduction

To determine: The minimum cost using transportation method.

Introduction: Aggregate planning using transportation method helps to attain the minimum cost with the optimal plan. The major advantage of transportation method is to achieve the optimal solution using optimal plans.

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A large St. Louis feed mill, Robert Orwig Processing,prepares its 6-month aggregate plan by forecasting demand for50-pound bags of cattle feed as follows: Ja nuary, 1,000 bags;February, I ,200; March, I ,250; April, 1,450; May, I ,400; and June,I ,400. The feed mill plans to begin the new year with no inventoryleft over from the previous year, and backorders a re not permitted.It projects that capacity (during regular hours) for p roducingbags of feed will remain constant at 800 until the end of April, andthen increase to 1,100 bags per month when a planned expansionis completed on May I. Overtime capacity is set at 300 bags permonth until the expansion, at which time it will increase to 400bags per month. A friendly competitor in Sioux City, Iowa, is a lsoavailable as a backup source to meet demand but can provideonly 500 bags total during the 6-month period. Develop a 6-monthproduction plan for the feed mill using the transportation method.
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