Problem 4-23 (Algorithmic) EZ-Windows, Inc., manufactures replacement windows fo

Question

Problem 4-23 (Algorithmic) EZ-Windows, Inc., manufactures replacement windows for the home remodeling business. In January, the company produced 15,000 windows and ended the month with 9000 windows in inventory. EZ-Windows' management team would like to develop a production schedule for the next three months. A smooth production schedule is obviously desirable because it maintains the current workforce and provides a similar month-to-month operation. However, given the sales forecasts, the production capacities, and the storage capabilities as shown, the management team does not think a smooth production schedule with the same production quantity each month is possible. Sales forecast Production capacity Storage capacity Februarv 15 ,000 14,000 6,000 March 16.500 14,000 6,000 April 20,000 18,000 6,000 The company's cost accounting department estimates that increasing production by one window from one month to the next will increase total costs by $1.00 for each unit increase in the production level. In addition, decreasing production by one unit from one month to the next will increase total costs by $0.65 for each unit decrease in the production level. Ignoring production and inventory carrying costs, formulate and solve a linear programming model that will minimize the cost of changing production levels while still satisfying the monthly sales forecasts. If required, round your answers to two decimal places. Let: F= number of windows manufactured in February M number of windows manufactured in March A - number of windows manufactured in April Im = increase in production level necessary during month m Dm = decrease in production level necessary during month m sm = ending inventory in month m

Explanation / Answer

Minimize I1 + I2 + I3 + 0.65D1 + 0.65D2 + 0.65D3

ST

F – S1 = 15000

S1 + M – S2 = 16500

S2 + A – S3 = 20000

F – I1 + D1 = 15000

M – F – I2 + D2 = 16500

A – M – I3 + D3 = 20000

F <= 15000

M <= 16,500

A <= 20,000

S1 <= 6000

S2 <= 6000

S3 <= 6000

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