Session 2

Production Mix
In preparation for the winter season, a clothing company
is manufacturing parka overcoats, goose overcoats,
insulated pants, and gloves. All products are
manufactured in four different departments: cutting,
insulating, sewing, and packaging.
The company has received firm orders for its products
The contract stipulates a penalty for undelivered items.
Objective: To Devise an Optimal Production Plan for
the company

Data for Production Mix

Time per Units (Hr)
Department

Parka

Goose

Pants

Gloves

Capacity(Hrs)

Cutting

.30

.30

.25

.15

1000

0.25

0.35

0.3

Sewing

0.45

0.5

1000
1000

Packaging

0.15

0.15

0.4
.1

0.1
0.22

Demand

800

750

Unit Profit
Unit Penalty

$30
$15

$40
$20

Insulating

0.05

600
$20

500
$10

$10

$8

1000

Production Schedule Example

Acme Manufacturing Company has contracted to deliver home windows over the next 6
months. The demands for each month are 100,250,190,140,220, and 110 units,
respectively.
Production cost per window varies from month to month depending on the cost of labour,
material, and utilities.
Acme estimates the production cost per window over the next 6 months to be $50, $45,
$55, $48, $52, and $50, respectively.
To take advantage of the fluctuations in manufacturing cost, Acme may elect to produce
more than is needed in a given month and hold the excess units for delivery in later
months.
This, however, will incur storage costs at the rate of $8 per window per month assessed
on end-of-month inventory.
Objective: Develop a linear program to determine the optimum production
schedule