Question: Problem 1

S-Song Company produces two types of HDTV’s: LCD and Plasma. They have agreed to deliver 5000 units of LCD’s in month 1 and 8000 units in month 2. For plasma’s, the agreement is 2000 units in month 1 and 4000 units in month 2. S-Song has two plants, one in Seoul and one in Busan. The available production hours and production rate for the products are given in the following table.

It costs $5,000 per hour of plant time to produce any product in either plant. The inventory carrying cost per month for each product is $200 per unit (charged on each month’s ending inventory). At present, there are 500 units of LCD’s and 750 units of Plasma’s in inventory. Formulate and solve an LP to determine the production schedule that minimizes the total cost incurred in meeting demand.