Operations Management (33:386) Summer 2016, Deniz Eskandani Assignment 2 Due: Wednesday, June 22 1. The Deckers Apparel Company produces all sorts of...

TheDeckersApparelCompanyproducesallsortsofclothingitems.Belowyoucan

findthedetailsabouttheshirtsproductionformonths1,2and3.

Month1 Month2 Month3

Demandinunits 1100 1200 1300

Productioncostper

unit $9.00 $11.00 $13.00

Youcankeeptheproductininventory.Foreachmonth,yourinventorycostis$0.55

timesthemonth'saverageinventory(whichyoucalculateastheaverageofthe

month'sbeginningandendinginventory). Theshirtsproductioncanbedoneatthe

Deckers'factoryoroutsourcedwhennecessary.

ú TheDeckersfactoryreceives2100squareyardsofclothatthebeginningof

month1,2500atthebeginningofmonth2,and2000atthebeginningofmonth

3.Eachmonth,ifnotallclothreceivedisused,thenitrollsovertothenext

month.Thatis,theamountofclothavailableeachmonthistheamountreceived

atthebeginningofthemonthplustheleftoverfrom thepreviousmonth.Each

shirtrequires2squareyardsofcloth.

ú Eachmonth,ifnecessary,thecompanyhastheoptionofoutsourcingpartofthe

shirtsproductionupto100unitsatacostof$25.00pershirt.Theamount

producedinoutsourcingdoesnot makeuseoftheexistentclothattheDeckers

factory.

ú Assumethat100shirtsareavailableatthebeginningofmonth1.

Deckerswantstodeterminehowtomeetdemandsforthenext3monthsat

minimumcost.

a.Drawthenetworkthatillustratesthedynamicsofthisproblem.

b.Writethelinearprogramformulationshowingalltheintermediate

calculations.

c.SolvetheproblemusingExcel.2.Yourfirmmakesfluorescentpaintpigmentsinfourplantsandsh