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During the next three months Shoemakers must meet (on time) the following demand for shoes with the following regular-time labor hours available: Demand(pairs of shoes): 1 month:1000 2 month:1500 3 month:1800 Regular-time labor available (hours) 1 month:1000 2 month:1200 3 month:1200 It takes 1 hour of labor to produce a pair of shoes. Each month the company can require workers to put in up to 400 hours of overtime. Workers are paid only for the hours they work, and a worker receives $16 per hour for regular-time work and $24, per hour for overtime work. At the end of each month, a holding cost of $6 per pair of shoes is incurred. What is the production scheduling for the three months which minimizes the total cost incurred in meeting the demands of theses months? (This problem can be set up as a minimum cost, network flow problem; but it is not necessary to use this technique.)

Operation Management, Management Studies

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