Question

Astro Winter LLC makes snowplowing equipment. The company buys the engines from a 3rd party vendor – Marshall Engines. Astro Winter has the following production schedule for February, March, April, and May: February – 60; March – 85; April 100; May – 120. Marshall Engines makes and delivers the products to Astro Winter during the month the engines are due. Marshall Engines can only manufacture 40 engines in February; 60 in March; 90 in April; and 50 in May. During the same time that Astro Winter makes their snowplows, Marshall Engines has a large order with another client. Marshall Engine is exploring several options to meet Astro Winter’s production schedule. It can produce up to 30 engines in November, December, and January and carry them in inventory at a cost of $50 per engine per month until it ships them to Astro Winter. For instance, Marshall could build an engine in November, and deliver it to Astro Winter in February and incur $150 in inventory cost. Marshal Engines could also manufacture up to 20 engines in the month they are due on an overtime basis, with an additional cost of $400 per engine. Marshall Engine wants to determine the least costly production schedule that will meet Astro Winter’s schedule.

Instructions: SOLVE USING EXCEL QM!!!!

1) Develop the LP model and determine the optimal production schedule for Marshall Engine.

2) If Marshall Engine were able to increase their production capacity in November, December, and January from 30 to 40 engines, what will be the impact on the optimal solution? Explain your answer.

Answer 1

Solution;+