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Exercise 1 - Solution - Answers

The document outlines a production planning problem with variables such as units produced, inventory, workforce, and overtime hours, aiming to minimize total costs under specific constraints. Part a reports a total cost of $360,400,000, while part b shows that increasing overtime hours reduces costs to $356,450,000. Further analysis in parts c and d explores the impact of workforce size and new constraints on total costs.

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26 views2 pages

Exercise 1 - Solution - Answers

The document outlines a production planning problem with variables such as units produced, inventory, workforce, and overtime hours, aiming to minimize total costs under specific constraints. Part a reports a total cost of $360,400,000, while part b shows that increasing overtime hours reduces costs to $356,450,000. Further analysis in parts c and d explores the impact of workforce size and new constraints on total costs.

Uploaded by

adin27352
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Exercise 1, Part a

Variables:
Pt =Nb of units produced per month(t=1… 12)

I t=Nb of units∈inventory at theend of month t ( t=1 … 12 )

W t =Nb workers∈month t ( t=1 …12 )

Ot =Number of hours worked on overtime ( t=1 ….12 )

Parameters
p❑= production cost
i❑ =inventory cost per unit
w❑ =monthly salary of the workers ,∨regular labor cost per month per employee
o=overtime cost per hour
Dt =demand ( ¿ units ) ∈ period t ( t=1… .12 )

Objective function
12 12 12 12
Minimize 3200 ∑ W t +20 ∑ Pt +3 ∑ I t +30 ∑ Ot
t =1 t =1 t =1 t =1

Constraints
Pt ≤ 960 W t + 6 Ot t=1… …12 , Production constraint

I t−1 + Pt −Dt=I t t=1 … ..12 , Inventory constraint

I 0=50000 , I 12=50000

Ot ≤ 20 W t t=1 … … 12, overtime constraint

W t =1250 t=1 … … .12, workforce constraint

(a) Worksheet “Part a” provides the solution to this problem and the corresponding aggregate
plan. The total cost of the plan is $360,400,000.

Part b
Variables:
Pt =Nb of units produced per month(t=1… 12)

I t=Nb of units∈inventory at theend of month t ( t=1 … 12 )

W t =Nb workers∈month t ( t=1 …12 )

Ot =Number of hours worked on overtime ( t=1 ….12 )

Parameters
p❑= production cost
i❑ =inventory cost per unit
w❑ =monthly salary of the workers ,∨regular labor cost per month per employee
o=overtime cost per hour
Dt =demand ( ¿ units ) ∈ period t ( t=1… .12 )

Objective function
12 12 12 12
Minimize 3200 ∑ W t +20 ∑ Pt +3 ∑ I t +30 ∑ Ot
t =1 t =1 t =1 t =1

Constraints
Pt ≤ 960 W t + 6 Ot t=1… …12 , Production constraint

I t−1 + Pt −Dt=I t t=1 … ..12 , Inventory constraint

I 0=50000 , I 12=50000

Ot ≤ 40 W t t=1 … … 12 , overtime constraint

W t =1250 t=1 … … .12, workforce constraint

(b) If the number of overtime hours per employee were increased from 20 to 40 it would result in
decreasing the total cost to $356,450,000. So, it is advantageous to do it.

(c) If the number of employees is decreased to 1200 and the overtime hours per employee are held at
20 and 40 then the total costs of the plan are $363,324,000 and $357,422,000, respectively. If the
number of employees is increased to 1300 and the overtime hours per employee are held at 20 and 40
then the total costs of the plan are $358,790,000 and $356,270,000, respectively. So, the value of
additional overtime increases as workforce size decreases.

(d) We add a new constraint:


Pt 1291.667, t 1,...12 . The cost will be $363,049,982.

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