QUESTION Bhengu Industries is expanding its product line to include three new products: M, N and O. These are to be prod

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Question Bhengu Industries Is Expanding Its Product Line To Include Three New Products M N And O These Are To Be Prod 1 (185.65 KiB) Viewed 34 times

QUESTION Bhengu Industries is expanding its product line to include three new products: M, N and O. These are to be produced on the same production equipment and the objective is to meet the demands for the three products using overtime where necessary. The demand forecast for the next four months in hours required to make each product is as shown below. Product July June 700 August 900 September 1000 M 500 N 600 800 700 1200 O 800 600 800 900 Because the products deteriorate rapidly, there is a high loss in quality and, consequently, a high carrying cost when a product is made and carried in inventory to meet future demand. Each hour's production carried into future months costs R50 per production hour for Model M, R70 for Model N, and R90 for Model O. Production can take place either during regular working hours or during overtime. Regular time is paid at R80 when working on M, R90 for N, and R100 for O. The overtime premium is 60 percent of the regular time cost per hour. The number of production hours available for regular time and overtime is: June July August September Regular time 1600 1400 1700 1900 Overtime 600 750 800 900 Set up the problem in a spreadsheet and an optimal solution for total cost of the aggregate production plan using the Excel Solver.