The next four questions are based on the following case: The Fevziye Ribbon Comp

Question

The next four questions are based on the following case: The Fevziye Ribbon Company produces paper and fabric decorative ribbon which it sells to paper products companies and craft stores. The demand for ribbon is seasonal. Information about projected demand and production for a particular type of ribbon is given. DemandProduction Cost Per Yard Production Capacity (yards) Quarter 130,000 Quarter 2 Quarter 3 Quarter 4 18,000 22,000 20,000 0.06 0.08 0.07 0.10 (yards) 32,000 16,000 25,000 18,000 An inventory holding cost of $0.01 is levied on every yard of ribbon carried over from one quarter to the next. The objective is to minimize total cost, the sum of production and inventory holding cost. Define the decision variables as follows: the production in yards in quarter i Let P Let S the ending surplus (inventory) in quarter i What is the appropriate objective function? a. Max: 0.06P +0.08P2 +0.07Ps + 0.10P4 +0.01(S +S2+S+S) 20. b. Min: Pi +P2 + P3 +P4 +Si +S2 +S3+ S c. Min: 0.06P 0.08P2 +0.07Ps+0.10P4 +0.01(S1 +S2+S+S) d. Min: 30,000P +18,000P2 + 22,000P + 20,000P4 +0.01(Si+S2+S+ S) e. Min: 32,000P 16,000P2 + 25,000Ps+ 25,000P4 +0.01 (Si+S2+S3+S)

Explanation / Answer

20)

Obejective function will have cost of producing and cost of holding surplus production.

So option C is correct

21)

Option d is correct.

For period 2 we have to consider S1, p2 and s2

22)

P4 is production. So it captures production capacity. Option d is correct

23)

Option e is correct

24)

Min 3M+5B

Option B is correct

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