Aire-Co produces home dehumidifiers at two different plants in Atlanta and Phoenix. The per-unit cost of production in Atlanta and Phoenix is $400 and $360, respectively. Each plant can produce a maximum of 300 units per month. Inventory holding costs are assessed at $30 per unit in beginning inventory each month. Aire-Co estimates the demand for its product to be 300, 400, and 500 units, respectively, over the next three months. Aire-Co wants to be able to meet this demand at minimum cost.
a) Word-process the linear programming model below.
Variable Definitions
At = Number of dehumidifiers produced at Atlanta Plant in period t, t = 1, 2, 3
Pt = Number of dehumidifiers produced at Phoenix Plant in period t, t = 1, 2, 3
It = Inventory at the end of month t, t = 1, 2, 3
Objective Function
Minimize Total Production and Inventory Cost Z =
Constraints
b) Set up the spreadsheet for Excel Solver. Copy and paste the spreadsheet below. Note:At and Pt are the only variables. It are not variables.
c) Copy and paste the Answer report below.
d) Write the Optimal Solution below.
|
Number of Humidifiers produced |
Month 1 |
Month 2 |
Month 3 |
| Atlanta Plant | |||
| Phoenix Plant |
Total Production and Inventory Cost Z =