What an extra hour of production time in q3 is worth

Assignment Help Supply Chain Management

Reference no: EM13835819

A company produces refrigerators and dishwashers. During the coming year quarterly demand for these products is as shown in the following table:

Product	Q1	Q2	Q3	Q4
Refrigerators	1500	1000	2000	1200
Dishwashers	1000	2000	1500	2500

The company wants a production schedule that meets the demand requirements in each quarter. Management has also decided that the inventory level for each product must be at least 150 units at the end of each Quarter. There is no inventory on hand at the start of the first quarter. In any quarter the inventory plus the production quantity minus the demand equals the inventory amount for the next quarter.

During any quarter 12000 hours of production time are available. A refrigerator requires 2 hours and a dishwasher 3 hours of production time. Refrigerators cannot be manufactured in the fourth quarter because the company plans to modify tooling for a new product line.

Assume that each refrigerator left in inventory at the end of a quarter incurs a holding cost of $5 and that each dishwasher left in inventory at the end of a quarter incurs a holding cost of $7. The company wants to plan its production schedule over the year in such a way that it meets the quarterly demands and minimizes the total inventory cost. Formulate and solve this production planning problem. Assume the solution need not be integer. Without re-solving state what an extra hour of production time in Q3 is worth.

Reference no: EM13835819

Questions Cloud

Write a report about developing country of your choice : Write a research report about developing country or related countries of your choice and discuss the cultural challenges that influence multinational operations - you should focus on both national and business culture.

Is there anything special about their roles : For your system, what roles or people are there with authorized access - and what information can they see or use. Is there anything special about their roles or their level of access? Are there exceptions

Find the shear stress : Problem: Find the Shear Stress. How do you find the y bar value of the hollow shaft? How did they arrive at that formula?

Business process model and notation : Business Process Model and Notation

What an extra hour of production time in q3 is worth : The company wants to plan its production schedule over the year in such a way that it meets the quarterly demands and minimizes the total inventory cost. Formulate and solve this production planning problem. Assume the solution need not be integer. W..

What access controls are required for any information system : What access controls are required for any Information System? Why are these controls needed? How do you prevent any unauthorized access

What impact does the internet have on this : Why should a service organization worry about being world class if it does not compete outside its own national border? What impact does the Internet have on this?

Describe the data flow process for a mobile order : Recently, a major hot beverage retail competitor established an order entry system whereby customers can place orders on a mobile app in advance of arriving at the retail outlet. Describe the data flow process for a mobile order that will be picked..

How is the linkage between poverty and discrimination reflec : How is the linkage between poverty and discrimination reflected

User Account

All Pages