Northwest Pipe (NP) makes water pipe. NP is planningproduction for the next seven months, March through September.Th e forecast demands (in thousands of feet) are, respectively, 40,60, 70, 80, 90, 100, and 80. NP can make 75,000 feet of pipe permonth using regular-time production, at a cost of $1.25 per foot.Th ey can make up to an additional 15,000 feet using overtimeproduction at a cost of $1.50 per foot. Any pipe made in onemonth and sold in a later month incurs an inventory holding costof $0.15 per foot, per month. NP expects to end February with5000 feet of pipe and would like to plan to end September with10,000 feet in inventory. NP would like to plan their productionschedule to minimize total cost during the next seven months. (a) Formulate an LP to minimize total costs.(b) Set up and solve the problem on a spreadsheet.(c) What is the optimal solution? Explain the rationale for thesolution
Northwest Pipe (NP) makes water pipe. NP is planning
production for the next seven months, March through September.
Th e
60, 70, 80, 90, 100, and 80. NP can make 75,000 feet of pipe per
month using regular-time production, at a cost of $1.25 per foot.
Th ey can make up to an additional 15,000 feet using overtime
production at a cost of $1.50 per foot. Any pipe made in one
month and sold in a later month incurs an inventory holding cost
of $0.15 per foot, per month. NP expects to end February with
5000 feet of pipe and would like to plan to end September with
10,000 feet in inventory. NP would like to plan their production
(a) Formulate an LP to minimize total costs.
(b) Set up and solve the problem on a spreadsheet.
(c) What is the optimal solution? Explain the rationale for the
solution
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