As the production manager of the Neptune Boat Corporation, you must determine how many units of...

As the production manager of the Neptune Boat Corporation, you must determine how many units of the Model 4W speedboat to produce over the next four quarters. The company has a starting inventory of 75 units, and demand is 125 units in quarter 1, 100 units in quarter 2, 40 units in quarter 3, and 20 units in quarter 4. Production capacity is limited to 70 units in quarter 1, 90 units in quarter 2, 50 units in quarter 3, and 60 units in quarter 4. The inventory cost during quarters 1 and 2 is $200 per unit per quarter, and $300 per unit per quarter during quarters 3 and 4. Production costs for the first quarter are $8,000 per unit, and these costs increase by 10% per quarter due to increasing labor and material costs. Neptune’s senior management has indicated that the ending inventory for quarter 4 must be at least 30 units. Develop a linear programming model that Neptune can use to determine the optimal production schedule that will minimize the total cost of meeting demand for the Model 4W speedboat in each quarter, subject to the capacity and inventory constraints. You do not need to solve the LP.

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orchestra answered 11 months ago

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