Formulate a linear program to determine production plan

Reference no: EM13143174

Contois Carpets is a small manufacturer of carpeting for home and office installations Production capacity, demand, production cost per square yard and inventory holding cost per square yard for the next three months are shown in the following table.

Month Capacity
(square yards) Demand(square yards)
Production Cost Inventory Cost

January 3500 1000 $20 $1.5
February3500 3000 $20 $1.5
March 4000 5000 $22 $1.5

There are 500 square yards in stock from December's production available at the beginning of January and a minimum of 500 square yards should be kept after this three month production period.
After estimating the effects of employee layoffs, turnovers, reassignment, training costs and other costs associated with fluctuating production levels, Contois estimates that the cost associated with increasing the production level for any month is $0.50 per square yard increase. A similar cost associated with decreasing the production level for any moth is $0.20 per square yard. The production level in December was 2500 square yards.

(a) Formulate a linear program to determine the production plan for the next three months that will minimize the total cost.

(b) Develop an EXCEL spreadsheet to find the optimal solution for Contois Carpets .

Reference no: EM13143174

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