b.

The number of desks that should be available monthly are as follows:

July: 120

August: 160

September: 210

October: 230

November: 310

December: 360

The number of parts that should be available monthly are as follows:

For July:

Part A: 240

Part B: 120

Part C: 360

Part D: 360

Part E: 720

For August:

Part A: 320

Part B: 160

Part C: 480

Part D: 480

Part E: 960

For September:

Part A: 420

Part B: 210
Part C: 630

Part D: 630

Part E: 1260

For October:

Part A: 460

Part B: 230

Part C: 690

Part D: 690

Part E: 1380

For November:

Part A: 620

Part B: 310

Part C: 930

Part D: 930

Part E: 1860

For December:

Part A: 720

Part B: 360

Part C: 1080

Part D: 1080

Part E: 2160

The production should start considering the lead time in the month of March because the lead
time for E is 2 months which then used to assemble part C which on its own has 1 month lead
time. Therefore, in order to start the production of desks from July, the production should
start considering the lead time from March.
c.

The number of desks produced for each month is equal to the forecasted demand. No ending
inventory of desks is maintained. The number of produced desks each month is as follows:

July: 120

August: 160

September: 210

October: 230

November: 310

December: 360

The number of parts maintained in inventory for each month are as follows:

Starting inventory of July:

Part A: 600

Part B: 120

Part C: 360

Part D: 4170

Part E: 720

Ending Inventory of July:

Part A: 360

Part B: 0

Part C: 0

Part D: 3810

Part E: 0

Starting inventory of August:

Part A: 860

Part B: 160
Part C: 1110

Part D: 3810

Part E: 7620

Ending Inventory of August:

Part A: 540

Part B: 0

Part C: 630

Part D: 3330

Part E: 6660

Starting inventory of September:

Part A: 1040

Part B: 210

Part C: 630

Part D: 3330

Part E: 6660

Ending Inventory of September:

Part A: 620

Part B: 0

Part C: 0

Part D: 2700

Part E: 5400

Starting inventory of October:

Part A: 1120

Part B: 230
Part C: 2700

Part D: 2700

Part E: 5400

Ending Inventory of October:

Part A: 660

Part B: 0

Part C: 2010

Part D: 2010

Part E: 4020

Starting inventory of November:

Part A: 1160

Part B: 310

Part C: 2010

Part D: 2010

Part E: 4020

Ending Inventory of November:

Part A: 540

Part B: 0

Part C: 1080

Part D: 1080

Part E: 2160

Starting inventory of December:

Part A: 1040

Part B: 360
Part C: 1080

Part D: 1080

Part E: 2160

Ending Inventory of December:

Part A: 320

Part B: 0

Part C: 0

Part D: 0

Part E: 0

Total Cost of Inventory for each Part:

Part A: 15200 SR

Part B: 0 SR

Part C: 14880 SR

Part D: 90510 SR

Part E: 36480 SR

d.

Total Profit:

The total profit of the company is equal to 1,605,230 SR.

e.

The decision variables for the number of part B ordered each month will be removed.
Moreover, the constraints to restrict these decision variables to integers will also be removed.

New decision variables added will be the integer multipliers (e.g.: 1, 2, 3 etc.) for each
month. These multipliers for each month when multiplied by 100 will give the number of part
B ordered for each month as multiples of 100.

The new decision variables will be:

MB1 = Multiplier for March

MB2 = Multiplier for April

MB3 = Multiplier for May

MB4 = Multiplier for June

MB5 = Multiplier for July

MB6 = Multiplier for August

MB7 = Multiplier for September

MB8 = Multiplier for October

MB9 = Multiplier for November

MB10 = Multiplier for December

These new decision variables are also restricted to integer values to ensure that the number of
units ordered are not fractional values.

MB1, MB2, MB3, MB4, MB5, MB6, MB7, MB8, MB9, MB10 = integer

Moreover, these decision variables must be non-negative to ensure that the number of part B
ordered is not negative.

MB1, MB2, MB3, MB4, MB5, MB6, MB7, MB8, MB9, MB10 >= 0

f.

The constraints are removed which were restricting the number of units made from
September to December equal to their respective demands.

A new cost of vouchers given is subtracted from the total profit (objective function). The cost
of vouchers given is calculated by multiplying the uncompleted orders during the last four
months with cost of a voucher which is 100 SR. Uncompleted orders are calculated by
production of desks from their demand for each month.

UO1 = Uncompleted orders in September = 210 – P1

UO2 = Uncompleted orders in October = 230 – P2

UO3 = Uncompleted orders in November = 310 – P3

UO4 = Uncompleted orders in December= 360 – P4

Voucher Given = VG = (UO1 + UO2 + UO3 + UO4) * 100

Objective Function:

The new objective function will be,

Total Profit:

MAX RG – TC – VG

Constraints:

Maximum Hours Constraint:

The number of production hours allowed for the last four months is 1000. Each desk takes 4
hours for production. Therefore, new constraints are implemented to make sure that the
number of hours spent on production during each month is less than or equal to 1000. The
right-hand side of these constraints is the maximum number of hours of production available
for the last four months.

P3 * 4 <= 1000

P4 * 4 <= 1000

P5 * 4 <= 1000

P6 * 4 <= 1000

Desk Production Constraint:

The desk production constraints for the months of July and August are the same. But the
constraints for the months of September to December are replaced with new ones. The new
constraints ensure that if there are production hours available even when the demand for a
month is satisfied, the production of desks does not increase beyond the demand for that
month. The right-hand side of these constraints is the demand for the respective months.

P3 <= 210

P4 <= 230

P5 <= 310

P6 <= 360