Boralis manufacture backpacks for hikers. The demand for its product during the peak period of March to June of each year is 100, 200, 180 and 300 units, respectively. The company uses part time labor to accommodate fluctuations in demand. It is estimated that Boralis can produce 50, 180, 280 and 270 units in March through June. A current month’s demand can be satisfied in one of the three ways: • Current month’s production at the cost of $40 per pack. • Surplus production in an earlier monthly at an additional holding cost of $0.50 per pack per month. • Surplus production in a later month (back-ordering) at an additional penalty cost of $2.00 per pack per month. Boralis wishes to determine the optimal production schedule for the four months.
1) Set up the Transportation Table,
2) Model for this TP,
3) Use NW corner and least cost methods to find the initial feasible solutions,
4) What is the optimum solution?