PROBLEM 1

The manager of manufacturing company has developed a forecast shown in the table for
bolts. The figures are in hundreds of bolts. The department has a normal capacity of
275(00) bolts per month, except for the 7th month when capacity will be 25(00) bolts.
Normal output has a cost of 40 per 100bolts. Workers can be assigned to other jobs if
production is less than normal. The beginning inventory is zero bolts.
A) Develop a chase plan that matches the forecast and compute the total cost of your
plan. Overtime is 60 per 100 bolts.
B) Would the total cost be less with regular production with no overtime, but using a
subcontractor to handle the excess above normal capacity at a cost of 50 100bolts?
Backlogs are not allowed. The inventory carrying cost is 2 per 100bolts.

PROBLEM 2

Beta associates produces accounting machine that have a seasonal demand pattern. We
required to plan for the optimum production rates and inventory levels for the next four
quarter periods. The available production capacities during the regular time and overtime
as well as other cost data are as follows:
Available inventory = 110 units
Desired final inventory = 140 units
Regular time cost/unit = 100
Overtime cost/unit = 125
Subcontracting cost/unit = 145
Inventory cost/unit/period = 15
The cost of un used capacity = 40/unit
Capacity in units
Period

Regular time

Overtime

Subcontract

1200

150

800

900

200

800

1000

350

800

700

350

800

Period

Units of demand

1200

1100

1800

1500

Formulate the problem as a transportation model and solve it.

PROBLEM 3

Given the following product structure, BOM, MPS and inventory status, develop MRP
tables for all items using EOQ methods.

Bill of Material (BOM)

Initial stock
Lead time
on hand
(month)

Item

Number of
units
required

CC

CO

125

1000

20

1500

30

1800

50

1300

100

2000

Master product schedule

Month

Project
requiremen
t

100

80

110

80

150

200

PROBLEM 1

An automobile manufacturer makes auto-mobiles and trucks in a factory that is

divided into two shops. Shop A, which performs the basic assembly operation
must work 5 man-days on each truck but only 2 man-days on each automobile.
Shop B, which performs finishing operation must work 3 man-days for each truck
or automobile that it produces. Because of men and machine limitations shop A
has 180 man-days per week available while shop B has 135 man-days per week. If
the manufacturer makes a profit of 300 on each truck and 200 on each
automobile, how many of each should he produce to maximize his profit?

PROBLEM 2

A gear manufacturing company received an order for three specific types of gears
for regular supply. The management is considering to devote the available excess
capacity to one or more of the three types, say A, B and C. the available capacity
on the machines which might limit output and the number of machine hours
required for each unit of the respective gear is also given below.
Available
Machine type

machine

Gear Hobbing m/c

Gear Shaping m/c
Gear Grinding m/c

hours/week
250
150
50

Productivity in machine hours/unit

Gear A

Gear B

Gear C

8
4
2

2
3
-

3
0
1

The unit profit would be 20, 6 and 8 respectively for the gears A, B and C.
find how much of each gear the company should produce in order to maximize
profit?

PROBLEM 3

High Tech industries import components for production of two different models
of personal computers, called deskpro and portable. High Techs management is
currently interested in developing a weekly production schedule for both
products. The deskpro generates a profit contribution of $50/unit, and portable
generates a profit contribution of $40/unit. For next weeks production, a max of
150 hours of assembly time is available. Each unit of deskpro requires 3 hours of
assembly time. And each unit of portable requires 5 hours of assembly time. High
Tech currently has only 20 portable display components in inventory; thus no
more than 20 units of portable may be assembled. Only 300 sq. feet of warehouse
space can be made available for new production. Assembly of each Deskpro
requires 8 sq. ft. of warehouse space, and each Portable requires 5 sq. ft. of
warehouse space.

Assembly line
Portable ass
Space
Profit cont.

PROBLEM 4

X1-Deskpro
3
8
50/unit

X2-Portable
5
1
5

40/unit

Capacity
150
20
300

A Furniture Ltd., wants to determine the most profitable combination of products

to manufacture given that its resources are limited. The Furniture Ltd., makes two
products, tables and chairs, which must be processed through assembly and
finishing departments. Assembly has 60 hours available; Finishing can handle up
to 48 hours of work.
Manufacturing one table requires 4 hours in assembly and 2 hours in finishing.
Each chair requires 2 hours in assembly and 4 hours in finishing. Profit is $8 per
table and $6 per chair.

Operation
Assembly
Finishing
Profit

Hours required for 1 unit of product

Tables
Chairs
4
2
2
4
8
6

Total hours available

60
48