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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.
1. (
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This note was uploaded on 03/17/2012 for the course MS 301 taught by Professor H during the Spring '12 term at Sabancı University.
 Spring '12
 H

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