stephen gonzales amandeep tamber ross nakata jonathan gutierrez
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No Backlogging Problem # 1(pg.104) October 20,2011

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Stephen Gonzales, Amandeep Tamber, Ross Nakata, Jonathan Gutierrez. No Backlogging Problem # 1(pg.104) October 20,2011. Outline. Problem Statement Problem Summary Assumptions Formulation Constraints Input Values Solutions Sensitivity Analysis Report to Manager. Problem Statement.

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Presentation Transcript
outline
Outline
  • Problem Statement
  • Problem Summary
  • Assumptions
  • Formulation
  • Constraints
  • Input Values
  • Solutions
  • Sensitivity Analysis
  • Report to Manager
problem statement
Problem Statement

A 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.

assumptions
Assumptions
  • No inventory at beginning of month
  • Unlimited capacity
  • Other costs in production were ignored
formulation
Formulation
  • Xt = number of commodities produced each month during month t
  • it = number of commodities on hand at the end of month t
  • where t=1,2,3,4 for each month in the problem.
  • O.F MINIMIZE COST

Z = 5x1+8x2+4x3+7x4+2i1+2i2+2i3-6i4

report to manger
Report to Manger
  • The minimum cost we calculated is $1,525
report to manager
Report to Manager

For month 2:

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