Question: A firm manufactures two products. Their production capacities for the two products, unit production costs, and estimated demands are shown in Table. The opening inventories of the two products are 0 and 10 units, respectively. At the end of Month 3, we do not want any inventories left. The inventory carrying costs are 20¢ per unit of product A and 50¢ for each unit of product B. These costs are incurred whenever one unit of a product is carried over from one month to the next. The total inventory levels (for both products combined) from Month 1 to Month 2 should not exceed 40 units, while the total inventory level between Months 2 and 3 should not exceed 50 units. Find a cost-minimizing production plan.
