A manufacturer of small electronic calculators is working on setting up his production plans for the next six months. One product is particularly puzzling to him. The orders on hand for the coming season are:
|
Month
|
Demand
|
|
January
|
100
|
|
February
|
150
|
|
March
|
200
|
|
April
|
100
|
|
May
|
200
|
|
June
|
150
|
The product will be discontinued after satisfying the June demand. Therefore, there is no need to keep any inventory after June. The production cost, using regular manpower, is $10 per unit. Producing the calculator on overtime costs an additional $2 per unit. The inventory-carrying cost is $0.50 per unit per month. If the regular shift production is limited to 100 units per month and overtime production is limited to an additional 75 units per month, what is the optimal production schedule? (Hint. Treat regular and overtime capacities as sources of supply for each month.)