A company faces the aggregate planning problem shown in the table below. Cost of regular production is $8 per unit, the cost of producing the same unit on overtime is $15, the cost of subcontracting is $12 per unit, and the cost of carrying a unit in inventory from one month to the next is $6.
|
January
|
February
|
March
|
April
|
May
|
|
Forecast
|
400
|
800
|
1200
|
700
|
300
|
|
Beginning Inventory
|
100
|
|
|
|
|
The labor contract at the plant prohibits both overtime and subcontracting output to exceed 400 units in any five month window. The plant capacity is 20 units per day produced using two shifts and the plant runs seven days a week. By policy, management wants to avoid stockouts.
- Formulate the aggregate plan using linear programming and solve it using Solver.
- What's the total cost of the aggregate plan?