Find the minimum cost production plan

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Given the projected demands for the next six months, prepare an aggregate plan that uses inventory, regular time, overtime, subcontract and backorders. Regular time is limited to 170 units per month (Cost per Unit = $30 ). Overtime is limited to a maximum of 20 units per month (Cost per Unit =$45). Units purchased from the subcontractor (Cost per Unit = $54 ) cannot exceed 50 per month and the total purchases from the subcontractor over the 6 month period cannot be over 150 units. Backorders cannot exceed 40 units in any given month (Cost per Unit = $5 ) and must be no more than 30 in Period 6. Average Inventory Holding cost per Unit = $10. Forecasted Demand as well as Beginning and desired Ending Inventory are listed in the table below.

Month 1 2 3 4 5 6 Total
Regular Output              
Overtime Output              
Subcontract              
Beginning Inventory 10            
Total Available for Sale              
Less Forecast 210 210 310 170 160 170  
Plus Backlog-Current Period              
Less Backlog-Previous Period              
Ending Inventory           0  
Average Inventory              

Required:

Find the Minimum Cost Production Plan by Creating a Spreadsheet in Excel. Use Solver to find the Minimum Cost Solution. Leave a copy of your Spreadsheet in the DropBox.

Total Cost Month 1 = Hint: Range (6550 ,6670 )

Total Cost Month 2 = Hint: Range (8820 ,8890 )

Total Cost Month 3 = 

Total Cost Month 4 = 

Total Cost Month 5 = Hint: Range (5220 ,5260 )

Total Cost Month 6 = 

Total Cost All Periods = Hint: Range (39290 ,40490 )

Answer Format: No Dollar ($) signs or commas --- Answers should be whole numbers.

Reference no:

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