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Linear Programming for Manufacturing Tractors

by | Dec 1, 2023 | Posted Questions

Linear Programming for Manufacturing Tractors

The Jane Deere Company manufactures tractors in Provo, Utah.
Jeremiah Goldstein, the production planner, is scheduling tractor production
for the next three months. Factors that Mr. Goldstein must consider include
sales forecasts, straight-time and overtime labor hours available, labor cost,
storage capacity, and carrying costs.

The marketing department has forecast that the number of
tractors shipped during the next three months will be 250, 305, and 350. Each
tractor requires 100 labor hours to produce. In each month, 29,000
straight-time labor hours will be available, and company policy prohibits
overtime hours from exceeding 10% of straight-time hours. Straight-time labor
cost rate is $20 per hour, including benefits. The overtime labor cost rate is
150% (time and half) of the straight-time rate. Excess production capacity
during a month may be used to produce tractors that will be stored and sold
during a later month. However, the amount of storage space can accommodate only
40 tractors. A carrying cost of $600 is charged for each month a tractor is
stored (if not shipped during the month it was produced). Currently, no
tractors are in storage.

How many tractors should be produced in each month using
straight-time and using overtime in order to minimize total labor cost and
carrying cost? 

Sales forecasts, straight-time and overtime labor capacities,
and storage capacity must be adhered to. Note that during each month, all
Asources@ of tractors must exactly equal Auses@ of tractors

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