I want to solve the below question in Lingo Software: Calpal is a small manufact
ID: 447715 • Letter: I
Question
I want to solve the below question in Lingo Software:
Calpal is a small manufacturer of a special engineering workstation. The company operates one plant with a monthly capacity of 3,000 units. In addition, 750 units can be produced on an overtime basis, which is 30% more expensive, on the average. The labor cost when producing a regular time is $1,000; it is $1,300 on overtime (per workstation produced). The company may use inventories to reduce fluctuations in production, but carrying inventories costs money. The cost of carrying one finished unit in inventory is $80 per unit per month.
Management is preparing a six-month production plan with the following stipulations:
a.All demand must be met according to the following schedule:
Month
1
2
3
4
5
6
Units
2,500
3,200
3,800
3,500
5,000
3,000
b. There should be no inventory left at the end of the sixth month.
c. There is no inventory at the present time.
The problem is to find the production schedule for the next six months that minimizes total cost.
Month
1
2
3
4
5
6
Units
2,500
3,200
3,800
3,500
5,000
3,000
Explanation / Answer
The schedule which reduces total cost is as below.
The idea is to start from the lat month. In month 6 we need only 3000 units and the same can be produced that month itself. Coming to month 5, the demand is 5000 units where as we can produce only 3750 at max. Hence the remaining 1250 units will have to be produced in previous months. Thus the demand for Month 4 will be actual demand 3500 + 1250, the carry over from Month 5 demand. Please find below the detailed table.
Month 1 2 3 4 5 6 Units 3,000 3,750 3,750 3,750 3,750 3,000Related Questions
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