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A company has known weekly orders for varying numbers of a given product over the few weeks. These requirements are 0, 0, 0, 50, 30, 60, 45, and 25. To make a production run for this product, it costs $25 to setup the machine and each unit produced costs an additional $100. The company has production capacity to produce 125 units per week and storage space for as many as 100 units of the products. It costs $1 per unit per week to store the products required in the future time periods. Assume that the production yield is 90% and the lead-time for production is 2 weeks. Consider that a production set up is being made during the current week for 24 units. Furthermore, there is an average inventory loss of 14% per week on the units stored between weeks. Formulate a mixed integer program for the above problem.

Operation Management, Management Studies

  • Category:- Operation Management
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