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Leekey.ST.6B.7A.L10X

# Leekey.ST.6B.7A.L10X - order to minimize total...

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LeeKey Waterbed Problem Lee Key makes waterbeds for a large department store chain. It has confirmed orders for 550, 800 and 200 beds at the end of each of the next 3 months, respectively. Lee Key cannot afford to have late deliveries or backorders. It has the capacity to make 680 beds each month at a unit cost of \$32. Using overtime labor, it can make up to 50 additional beds per month at a cost of \$35 each. Beds not shipped at the end of the month in which they are produced must be stored and are assigned a cost of \$2.00 per bed per month based on ending inventory levels. At present, Lee Key has 10 beds in inventory and wishes to have no beds in inventory at the end of the third month. Lee Key wants to know how many beds to make each month in

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Unformatted text preview: order to minimize total manufacturing and inventory costs. Leekey Waterbeds Month1 Month2 Month3 Costs Input Data \$2.00 Beg Inv = 10 =End Inv Demand 550 800 200 Supply Regular 680 680 680 \$32.00 ExtraTime 50 50 50 \$35.00 Action Plan Month1 Month2 Month3 Month1 Regular 660 680 200 <= 680 ExtraTime <= 50 On hand after production 670 800 200 Demand 550 800 200 Ending Inventory 120 >= Ending Inventory Month 3 = Cost Issues Month1 Month2 Month3 Regular \$21,120.00 \$21,760.00 \$6,400.00 \$49,280.00 ExtraTime \$- \$- \$- \$- Ending Inventory \$240.00 \$- \$- \$240.00 \$21,360.00 \$21,760.00 \$6,400.00 \$49,520.00 I =10 I 1 I 2 I 3 /unit /unit /unit Month2 Month3 680 680 50 50...
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Leekey.ST.6B.7A.L10X - order to minimize total...

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