The company can produce a maximum of 300 alarm systems per month. The company wants to determine its production schedule for the last six months of the year. The cost to produce an alarm system in July will be $1,000. However, the company knows the cost of component parts will decrease 3% each month. The cost of holding an alarm system in inventory is $10 per month. Following is the demand for the company’s alarm systems each month:
Month Demand Month Demand
July 300 October 220
August 200 November 410
September 340 December 330
Determine a production schedule at the minimum total cost using QM for windows.