Presentation on theme: "No Backlogging Problem # 1(pg.104) October 20,2011"— Presentation transcript:
1No Backlogging Problem # 1(pg.104) October 20,2011 Stephen Gonzales, Amandeep Tamber, Ross Nakata, Jonathan Gutierrez
2Outline Problem Statement Problem Summary Assumptions Formulation ConstraintsInput ValuesSolutionsSensitivity AnalysisReport to Manager
3Problem StatementA customer requires during the next four months, respectively, 50, 65, 100, and 70 units of a commodity (no backlogging is allowed). Production costs are $5, $8, $4, and $7 per unit during these months. The storage cost from one month to the next is $2 per unit (assessed on ending inventory). It is estimated that each unit on hand at the end of month 4 could be sold for $6. Formulate an LP that will minimize the net cost incurred in meeting the demands of the next four months.
5Assumptions No inventory at beginning of month Unlimited capacity Other costs in production were ignored
6FormulationXt = number of commodities produced each month during month tit = number of commodities on hand at the end of month twhere t=1,2,3,4 for each month in the problem.O.F MINIMIZE COSTZ = 5x1+8x2+4x3+7x4+2i1+2i2+2i3-6i4
10Production Cost per Unit Units Remaining at End of Month Solution TableMonthUnits to ProduceProduction Cost per UnitTotal Production CostDemandUnits Remaining at End of MonthInventory CostTotal Cost1115$$5065$$2$$$$3170$$10070$$4$GRAND TOTAL$ 1,525.00