Goog Tablets produces educational tablets to universitites and instiutions.

They are
currently finishing the production of their A360 model in the next 6 month.
 they currently have 5500 tablets in stocks and their demand for the next 6 month are
4000,9000,2000,7000,6500 and 9200
The capacity of production is 8000 every month and the cost of production per tablet
is at 1850 USD
By using overtime, up to an additional 1500 tablets can be produced at a cost of
$1875 each. Tablets produced in a month can be used either to meet that month
demand, or be held in inventory for use later. Each tablet in inventory is charged $20
as carrying costs.
The fixed cost for the month of Production is 400000
How should Goog meet its demand for tablets at minimum cost?
hey are

month are

per tablet

st of
month
rged $20
 Production
Period Demand FC Fixed Cost Production Cost OT Storage cost Capacity Capacity OT
Cost ($/unit) ($/unit)
($/unit)

M1 4000 400000 1850 1875 20 8000 1500

M2 9000 400000 1850 1875 20 8000 1500
M3 2000 400000 1850 1875 20 8000 1500
M4 7000 400000 1850 1875 20 8000 1500
M5 6500 400000 1850 1875 20 8000 1500
M6 9200 400000 1850 1875 20 8000 1500
 I.Inventory 5500

Production Production Inventory Open line Total Linking Inventory Fixed Cost
Units Overtime Production Constraint Constrains

0 0 1500 0 0 0 4000 0
8000 1500 2000 1 9500 0 9000 400000
0 0 0 0 0 0 2000 0
7000 0 0 1 7000 -2500 7000 400000
7700 0 1200 1 7700 -1800 6500 400000
8000 0 0 1 8000 -1500 9200 400000
TOTAL COST
 Variable Inventory Total Cost
Cost Cost

0 30000 30000
17612500 40000 18052500
0 0 0
12950000 0 13350000
14245000 24000 14669000
14800000 0 15200000
TOTAL COST $61,301,500.00