QMB4701 Assignment 1 Linear Programming Solutions
Aire-Co produces home dehumidifiers at two different plants in Atlanta and Phoenix. The per-unit cost of production in Atlanta and Phoenix is $400 and $360, respectively. Each plant can produce a maximum of 300 units per month. Inventory holding costs are assessed at $30 per unit in beginning inventory each month. Aire-Co estimates the demand for its product to be 300, 400, and 500 units, respectively, over the next three months. Aire-Co wants to be able to meet this demand at minimum cost.
a. Formulate an LP model for this problem.
b. Implement your model in a spreadsheet and solve it.
c. What is the optimal solution?
e. How does the solution change if each plant is required to produce at least 100 units per month?