Planning three month production schedule for new product

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A manufacturing firm is planning a three month production schedule for a new product. From past production records the manager knows that 1,200 units can be produced per month. Also, an additional 400 units can be produced monthly on a overtime basis. The unit costs of items produced on a regular time basis is $15 and $20 on an overtime basis. The demands for the next 3 months are 1000, 1500, and 1800. Excess production may be stored at a cost of $1 per item per month. The manager wants to know the monthly production schedule that will minimize the total cost.

1. Formulate this problem as a regular linear programming model based on the material balance equation.

2. Formulate this problem as a transportation model.

Reference no: EM131801021

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