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07 Inventory Problem

The document outlines an inventory problem for a cellphone company planning its production for the next 6 months. It includes parameters such as production and inventory costs, monthly demand, and constraints on production capacity and inventory levels. The goal is to minimize costs while meeting demand and maintaining a minimum inventory at the end of the period.

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mdmehrabhossainaupy6
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2 views1 page

07 Inventory Problem

The document outlines an inventory problem for a cellphone company planning its production for the next 6 months. It includes parameters such as production and inventory costs, monthly demand, and constraints on production capacity and inventory levels. The goal is to minimize costs while meeting demand and maintaining a minimum inventory at the end of the period.

Uploaded by

mdmehrabhossainaupy6
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

IE 572 Linear Programming Fall 2017

Inventory Problem
A cellphone company wants to design its production plan for the next 6 months. The company estimates that
the production and inventory costs per phone produced, as well as the demand change month to month, as
indicated in the table below. Furthermore, the company can produce at the most 50 thousands of cellphones
per month. To prepare for the future, the company requires that at the end of the last month, there should
be at least 20 thousands cellphones left in the inventory. The initial inventory is 10 thousands.

Parameters / Month Month 1 Month 2 Month 3 Month 4 Month 5 Month 6


Production Cost 100 200 50 10 20 30
Inventory Cost 50 30 60 70 10 10
Orders (thousands) 10 15 20 6 80 70

The company wants to minimize the production and inventory cost while satisfying the estimated monthly
demand. Write a general formulation for this problem. Make sure you describe all the elements of your
formulation (i.e., decision variables, parameters, constraints, and objective function).

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