# A company must meet the following demands for a product: January, 30 units; February, 30 units;…

A company must meet the following demands for a product: January, 30 units; February, 30 units; March, 20 units. Demand may be backlogged at a cost of\$5/unit/month. All demand must be met by the end of March. Thus, if 1 unit of January demand is met during March, a backlogging cost of 5(2) = \$10 is incurred. Monthly production capacity and unit production cost during each month are given in Table 66. A holding cost of \$20/unit is assessed on the inventory at the end of each month. a. Formulate a balanced transportation problem that could be used to determine how to minimize the total cost (
A company must meet the following demands for a product: January, 30 units; February, 30 units; March, 20 units. Demand may be backlogged at a cost of\$5/unit/month. All demand must be met by the end of March. Thus, if 1 unit of January demand is met during March, a backlogging cost of 5(2) = \$10 is incurred. Monthly production capacity and unit production cost during each month are given in Table 66. A holding cost of \$20/unit is assessed on the inventory at the end of each month. a. Formulate a balanced transportation problem that could be used to determine how to minimize the total cost (including backlogging, holding, and production costs) of meeting demand. b. Use Vogels method to find a basic feasible solution. c. Use the transportation simplex to determine how to meet each months demand. Make sure to give an interpretation of your optimal solution (for example, 20 units of month 2 demand is met from month 1 production).

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