Looking for Excel file and following points. Spreadsheet providing detailed information on monthly production, inventory, lost sales, and the different cost categories solving a linear optimization model for minimizing the total cost of meeting demand over the next year. 1) Compare solution with level production strategy of producing 9,100 units each month. 2) Interpret the Sensitivity report and conduct an appropriate study of the how solution will be affected by changing the assumption of the lost sales costs.
Chapter 14 511 Applications of Linear Optimiza case: Performance Lawn Equipment dzabeth Burke wants a model to more ef Material balance constraint has a planned for the ear. Currently, PLE is approximately the mowers de average monthly demand in month t mand over the previous However, looking at the unit sales figures for the previous year, she observed that the Overtime/undertime constraint demand for mowers has a seasonal fluctuation, so with normal production capacity this “level” production strategy, there is n some in excess inventory buildup and Production rat constraint underproduction in others, which may result in lost sales during peak demand periods. In discussing this with her, she explained that she Ms. Burke also provided the following data and es $70.00 could change the production rate by using planned over timates for the next year: unit production cost time or undertime producing more or less than the av $1.40 per unit per month; lost erage monthly demand), but this incurs additional costs nventory-holding cost $6.50 per $200 per unit; overtime cost although it may offset the cost of lost sales or of main sales cost production $3.00 per unit; and unit; undertime cost taining excess inventory. Consequently, she believes that $5.00 per unit, which applies to any rate-change cost the prev increase or decrease in the production rate from the company can save a significant amount of money by optimizing the production plan ous month. Initially, 9 units are expected to be in in ventory at the beginning of January, and the production Ms. Burke saw a presentation at a conference about a similar model that another company used but didn’t understand the approach. The PowerPoint notes didn’t rate for December 2012 was 9.100 units. She believes that monthly demand wi l not change substantially from last year, so the sales figures for last year in the PLE database should be used for the monthly demand forecasts. de Your task is to design a spreadsheet that provides lost ailed information on monthly production, inventory, and the different cost categories and solve a linear optimization model for minimizing the total cost of meet ing demand over the next year. Compare your solution with the level production strategy of producing 9.100 units each month. Interpret the Sensitivity report, and conduct have all the details, but they did explain the variables and the types of constraints used in the model. She thought they would be helpful to you in implementing an optimiza- tion model. Here are the highlights from the presentation Variables planned production in period t inventory held at the end of period t Lt number of lost sales incurred in period t be affected an appropriate study of how the solution will amount of overtime scheduled in period t by changing the assumption of the lost sales costs. Sum U, undertime scheduled in period t amount of from period t ncrease in roduction rate marize all your results in a report to Ms. Burke to period t from period t decrease in roduction rate to period t