questions_quiz1_F08

questions_quiz1_F08 - RONALD THUMPS INVENTORY MANAGEMENT...

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Page 3 of 10 RONALD THUMP’S INVENTORY MANAGEMENT PROBLEMS A. Having finally convinced himself that global warming is a reality, Ronald Thump has decided to start an air conditioning business. He already has several customers lined up, all eager to try the new equipment that promises high quality and increased efficiency at a reasonable price. Always focusing short-term, Ronald wants to determine the production and inventory plan for the next three months only. During the next three months, Ronald’s business must meet the following demands for air conditioners: month 1, 300; month 2, 400; month 3, 500. Being completely out of touch when it comes to cost, Ronald has chosen to operate his plant in New York. It takes 2 hours of skilled labor and costs $350 to produce one air conditioner in New York. During each month, the plant has 600 hours of skilled labor available. In New York, it costs $100 to hold an air conditioner in inventory for a month. At the beginning of month 1, Ronald has 300 air conditioners in stock. Formulate, without solving, a linear decision model 1. (3 points) Decision variables that will determine how Ronald can minimize the production and inventory costs of meeting air conditioner demands for the next 3 months. In your mathematical formulation, explicitly state the
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questions_quiz1_F08 - RONALD THUMPS INVENTORY MANAGEMENT...

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