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Question: The demand for a special small engine over the next five quarters is 200, 150, 300, 250, and 400 …

by | Nov 30, 2023 | Posted Questions



The demand for a special small engine over the next five
quarters is 200, 150, 300, 250, and 400 units, respectively. The
manufacturer supplying the engine has different production
capacities estimated at 180, 230, 430, 300, and 300 for the five
quarters. Backordering is not allowed, but the manufacturer may use
overtime to fill the immediate demand, if necessary. The overtime
capacity for each period is half the regular capacity. The
production costs per unit for the five periods are $100, $96, $116,
$102, and $106, respectively. The overtime production cost per
engine is 50% higher than the regular production cost. If an engine
is produced now for use in later periods, an additional storage
cost of $4 per engine per period is incurred. Formulate the
problem as a transportation model
. Determine the optimum
number of engines to be produced during regular time and overtime
of each period.

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