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Computer-Prod Exercise

The document outlines a computer production planning scenario detailing costs associated with manufacturing, holding, and production adjustments over four quarters. It includes specific figures for unit costs, production levels, inventory, and total monthly costs, aiming to minimize total costs over the planning horizon. Additionally, it discusses the application of linear programming for optimizing inventory management in the U.S. retail industry to meet customer demand efficiently.

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Huzaifa Jalil
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6 views2 pages

Computer-Prod Exercise

The document outlines a computer production planning scenario detailing costs associated with manufacturing, holding, and production adjustments over four quarters. It includes specific figures for unit costs, production levels, inventory, and total monthly costs, aiming to minimize total costs over the planning horizon. Additionally, it discusses the application of linear programming for optimizing inventory management in the U.S. retail industry to meet customer demand efficiently.

Uploaded by

Huzaifa Jalil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Computer Production Planning

Unit manufacturing cost $ 1,200.00


Unit holding cost $ 300.00
Unit cost of increasing production $ 2,100.00
Unit cost of decreasing production $ 1,800.00

Initial inventory 0
Previous quarter's production level (quarter 0) 1500

Quarter 1 Quarter 2
Previous quarter's production level 1500 1650
Increase in production level 150 0
Decrease in production level 0 0
This quarter's production level 1650 1650
Number available for meeting quarterly demand 1650 2100
Demand for quarter 1200 2100
Ending inventory 450

Quarter 1 Quarter 2
Monthly manufacturing costs $ 1,980,000.00 $ 1,980,000.00
Monthlly holding costs 0 0
Costs of increasing production $ 315,000.00 $ -
Costs of decreasing production $ - $ -
Total monthly costs $ 2,295,000.00 $ 1,980,000.00
Total cost for planning horizon $ 8,145,000.00 <- Minimize

Linear programming may be applied to the inventory operation in the U.S. retail industry to
maximize inventory inventory management across several stores. At various locations,
customer demand may left limited warehouse space and transportation resources to a retail
chain to be met. The company can find out which stores have inventory levels that keep
storage and transportation costs to a minimum while still meeting demand. A better stocked
stores with operational costs reduced and product availability increased would be the case.
Quarter 3 Quarter 4
1650 1500
0 0
150 0
1500 1500
1500 1500
1500 600

Quarter 3 Quarter 4
$ 1,800,000.00 $ 1,800,000.00
0 0
$ - $ -
$ 270,000.00 $ -
$ 2,070,000.00 $ 1,800,000.00

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