PM Computer Services produces personal computers from component parts it buys on the open market. The company can produce a maximum of 300 personal computers per month. PM wants to determine its production schedule for the first 6 months of the new year. The cost to produce a personal computer in January will be $1,200. However, PM knows the cost of component parts will decline each month so that the overall cost to produce a PC will be 5% less each month. The cost of holding a computer in inventory is $15 per unit per month. Following is the demand for the company’s computers each month: Month Demand Month Demand January 180 April 210 February 260 May 400 March 340 June 320 Determine a production schedule for PM that will minimize total cost.
PM Computer Services produces personal computers from component parts it buys on the open
market. The company can produce a maximum of 300 personal computers per month. PM wants
to determine its production
a personal computer in January will be $1,200. However, PM knows the cost of component parts
will decline each month so that the overall cost to produce a PC will be 5% less each month. The
cost of holding a computer in inventory is $15 per unit per month. Following is the demand for
the company’s computers each month:
Month Demand Month Demand
January 180 April 210
February 260 May 400
March 340 June 320
Determine a production schedule for PM that will minimize total cost.
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