In: Operations Management
Topic: Economic Order Quantity
Determine the Economic Order Quantity in Excel for:
Price of Product: $150
Savings Rate: 12%
Annual Usage: 16240
Cost of transportation: $200/order
Cost of PO preparation: $60/order
Warehouse Rental: $8/piece
Topic: Linear Programming
Develop problem 1 of chapter 8 using excel or by hand. You need to
present the objective and constraints equations. No need to solve
it.
The Waikiki Enterprise Corporation produces two types of computers at its manufacturing plant in Torrance, California. Profit on computers A is $900 per unit and for computer B it is $600. The manufacturing plant can produce not more than 50 of computer A and 100 of computer B a day. The following table displays the capacity for the manufacturing plant.
a) What are the decision variable?
b) What is the objective function?
c)What are the constraints?
d)What are the non-negativity assumptions?
Spreadsheet Modeling for Business Decisions Third Edition Revised for Excel 2010 byJohn F. Kros. Chapter8.2
Word and Excel
Linear Programming
1. Decision Variable -
X : no of units produced of computor A
Y: no of units produced of computor B
2. Objective Function
Objective is to have maximim profit
Maximize: 900 * X + 600 * Y
3. Constraints-
Production capacity of computor A: X <= 50
Production capacity of computor B: Y <= 100
d) Non-negativity assumption
Production of computor will not be negative
X >= 0
Y >= 0