It Costs $20 to Make a Single Unit Using Regular

question 28

Essay

It costs $20 to make a single unit using regular production and $25 to make a single unit using overtime production. Total overtime production is limited to 50 units for the five-month period. The manufacturing plant has a regular production capacity of 300 units per month and no units in inventory at the start of the planning period. There is a $10 per unit charge for holding inventory at the end of each month and the ending inventory of the five-month planning period should be zero. Develop an objective function and constraints to solve this problem.
$$\begin{array} { | l | c | } \hline { \text { Month } } & \text { Forecast } \\\hline \text { August } & 250 \\\hline \text { September } & 200 \\\hline \text { October } & 300 \\\hline \text { November } & 400 \\\hline \text { December } & 500 \\\hline\end{array}$$

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Definitions:

Standard of Living

The degree of prosperity, amenities, tangible assets, and basic needs accessible to an individual, community, or country.

Consumer Price Index

A tool that measures the typical fluctuation across time in the costs faced by urban shoppers for a specified mix of consumer goods and services.

GDP Deflator

A measure of the price level of all new, domestically produced, final goods and services in an economy, used to adjust nominal GDP to real GDP.

Substitution Bias

A distortion in the Consumer Price Index due to changes in consumer purchase behavior or product substitutions.