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This is the slack time of the year at Iota Inc. The company would actually like to shut the plant down, but if the they do, the highly skilled and trained core employees would likely be picked up by a competing company which is undesirable. The company could keep the core employees busy by producing (at a minimum) 10,000 round tables per month, or by making 20,000 square tables per month, or some ratio thereof. Iota does however have a standing contract to produce 5,000 square tables per month. Handling and storage costs per round tables are S10 and per square table are S8. Formulate a linear program to minimize the costs. Hint: Let x1-the thousands of round tables per month and let x2 = the thousands of square tables per month. Solve graphically to determine the optimal quantities and cost. Ans-x1 7500, x2 5000, z-115,000.

Operation Management, Management Studies

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