In: Operations Management
4. (20 pts) GA Industries manufactures handling equipment used in distribution centers. One product, called a Liftmaster, has three components: a frame with strap, a motor and two supports. The most recent order has been for 4000 Liftmasters for next month. The sales and production departments must work together to determine delivery schedules. Although the processes used in the manufacture of the three components vary, there are three areas where the production manager is concerned about the availability of resources. These three areas, their usage by the three components, and their availability are detailed in the table.
Resource |
Frame |
Motor |
Support |
Available |
Steel |
32 |
7 |
12 |
54000 units |
Cutting |
26 |
15 |
9 |
35000 minutes |
Shaping |
25 |
11 |
5 |
28000 minutes |
A quick look at the amounts available confirms that GA does not have the resources to fill this contract. A subcontractor, who can make an unlimited number of each of the three components, quotes the prices below.
Component |
Subcontractor Cost |
GA Cost |
Frame |
50 |
36 |
Motor |
16 |
14 |
Support |
8 |
6 |
The subcontractor requires that the minimum purchase of frame is 600. Due to their production capacity onstraint, the subcontractor can only supply up to 2500 motors.
Develop a linear programming model that would tell GA how to fill the order for 4000 Liftmasters at the minimum cost.
Decision Variables:
FM = units of frame manufactured
FP = units of frame procured
SM = units of support manufactured
SP = units of support procured
TM = units of motor manufactured
TP = units of motor procured
Formulation:
Min |
$36*FM |
+ |
$50*FP |
+ |
$6*SM |
+ |
$8*SP |
+ |
$14*TM |
+ |
$16*TP |
||
s.t. |
|||||||||||||
Steel required |
32*FM |
+ |
12*SM |
+ |
7*TM |
≤ |
54,000 |
||||||
Cutting minutes required |
26*FM |
+ |
9*SM |
+ |
15*TM |
≤ |
35000 |
||||||
Shaping minutes required |
25*FM |
+ |
5*SM |
+ |
11*TM |
≤ |
28000 |
||||||
Frames required |
FM |
+ |
FP |
≥ |
4000 |
||||||||
Support required |
SM |
+ |
SP |
≥ |
8000 |
||||||||
Motor required |
TM |
+ |
TP |
≥ |
4000 |
||||||||
Minimum purchase of frame |
1*FP |
>= |
600 |
||||||||||
Maximum purchase of motors |
1*TP |
<= |
2500 |
||||||||||
FM, FP, SM, SP, TM, TP ≥ 0 |
Excel Model:
Item |
Manufactured |
Purchased |
Frame |
460 |
3540 |
Support |
0 |
8000 |
Motor |
1500 |
2500 |
Total cost = $318,560