A manufacturer of industrial seafood processing equipment wants you to develop an aggregate plan for the four quarters of the upcoming year using the following data on demand and capacity
Quarter Units Regular Time Over-
time Sub-
contract Initial inventory Regular time cost 250 units $1.25/unit
1 200 400 80 100 Overtime cost $1.50/unit
2 750 400 80 100 Subcontracting cost 2.00/unit
3 1200 800 160 100 Carrying cost $0.50/unit/quarter
4 450 400 80 100 No back ordering is allowed
a. Find the optimal plan using the transportation method.
b. What is the cost of the plan?
c. Does any regular time capacity go unused? How much in what periods?
d. What capacity went unused in this solution? (List in detail.)
The optimal plan appears in the table below. A cost of 100 is assigned to "impossible" cells (no back orders are allowed.) Cost increases 0.50 for each period past the current period (carrying cost). The minimum cost solution is $3,360. Forty units of regular time capacity went unused in period 1. Other unused capacity includes OT-1, 80; Sub-1, 100; Sub-2, 100; and OT-4, 30; and Sub-4, 100.
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