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solutionexammarch262011 - Faculty of Engineering and...

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Faculty of Engineering and Natural Sciences Industrial Engineering Solution Midterm exam MS 301 March 26 2011, 11.00 - 13.00 Remark: keep your answers as short as possible but of course complete. Also read very carefully the questions. The total number of points of this exam is 100. At the beginning of each part of the exercise the total number of points are listed. Please write your student number at each page and write clearly. To avoid noise during the whole exam it is only allowed during the first hour of the exam to ask questions. Within two weeks the results of the exam will be known. Exercise 1. (30 points) The demand for a special small engine over the next five quarters is 200 , 150 , 300 , 250 , and 400 units. The manufacturer supplying the engine has different production capacities estimated at 180 , 230 , 430 , 300 , and 300 for the five quarters. All the demand should be met in time (this means no back ordering is allowed), but if necessary the manufacturer may use overtime to fill the immediate demand.The overtime capacity for each period is half of the regular capacity. The production costs per unit for the five periods are $100 , $96 , $116 , $102 , and $106 , respectively. The overtime production cost per engine is 50% higher than the regular production cost. If an engine is produced now for the use in later periods, a storage cost of $4 per engine per period is incurred. Clearly the objective of the management is to come up with a production plan to minimize the sum of the total production and overtime production costs and the inventory costs.
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