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Thread: Linear Programming: Formulating as a LP

  1. #1
    Sep 2008

    Linear Programming: Formulating as a LP

    Hey I'm having major trouble with a question from my assignment, if anyone could help it would be much appreciated. Basically I'm trying to formulate the following question as an Linear Program:

    A manufacturer has contracted to produce 2,000 units of a particular product

    over the next eight months. Deliveries are scheduled as follows:

    Month Units
    January 100
    February 200
    March 300
    April 400
    May 100
    June 100
    July 500
    August 300
    Total 2,000

    The manufacturer has estimated that it costs her $1 to store one unit of product for one month. She has a warehouse capacity of 300 units.
    The manufacturer can produce any number of units in a given month, since the units can be produced mostly with part-time labour, which can be easily obtained. However, there are costs of training new personnel and costs associated with laying off personnel who have been hired. The manufacturer has estimated that it costs approximately 75 cents per unit to increase the production level from one month to the next ( e.g., if production in January is 200 and is increased to 300 in February, the cost is $75 for training the additional people required to produce at the 300-unit level ).
    Similarly, it costs 50 cents per unit to reduce production from one month to the next. At the end of eight months, all employees will be laid off, with the corresponding production-reduction costs. Assume the production level before January is zero.

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  2. #2
    Sep 2008
    What i have done so far is:

    Inventory in Storage (Ii) = Xi + Yi-1 - Orders <= 300 for i = {1,....,8}
    Xi is that months storage
    Yi-1 is last months storage

    In the first period, storage is:
    X1 - 100 <= 300 -> X1<=400
    Cost of storage is $1(X1 - 100) {so cost of storage is the amount of storage}
    Total Cost in first period is (X1 - 100) + 0.75X1 = 1.75X1 - 100
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