Reference no: EM133014822

CSR company manufactures air conditioners at two different sites in Melbourne and Sydney. The cost of production for each unit in Melbourne is $400 and in Sydney $360. Each site is able to produce 300 units at the maximum capacity each month. The cost of inventory is estimated to be $30 for each unit which is imposed at the beginning of each month. CSR has forecasted to receive 300, 400, and 500 units of demand for the next three months and has accepted to satisfy this demand while minimising the total cost.

a) Formulate an LP model for this problem and write the model. Then, solve it in Solver. You must submit the Excel file and report the optimal solutions and value of the objective function.

Note: You MUST run Excel solver and save the final spreadsheet after running the Solver. In your Excel, indicate the cells for optimal solutions, decision variables, and used resources clearly with "Red colour". Make sure you also report them in the box below.

b) Consider a scenario where each site has to produce a minimum of 50 units each month. Would this impact the optimal solutions? Explain how?