DECISION VARIABLES:
The variables in this problem would be the number of each kind of tools manufactured
from regular and overtime hours and subcontracted
Let the number of units undergoing stage 1, stage 2 and subcontracted be:
Regular Overtime
Units
Stage 1 Stage 2 Stage 1 Stage 2 Subcontracted
Trowel R1T R 2T O1t O 2t S1T
Hoe R1H R2H O1H O2H S1H
Rake R1R R2R O1R O2R S1R
Shovel R1S R 2S O1S O 2S S1S
OBJECTIVE:
The main objective is to minimize the overall cost.
Cost of regular stage 1 production:
This cost can be calculated by summing up the cost of each tool. Cost of each tool can
be calculated by the product of the number of units multiplied by the cost of tool for
stage 1.
CR1 6 R1T 10 R1H 8 R1R 10 R1S
Cost of regular stage 2 production:
This cost can be calculated in the similar manner as above:
CR 2 3R 2T 5R 2 H 4 R 2 R 5R 2 S
Cost of overtime stage 1 production:
CO1 6.2O1T 10.7O1H 8.6O1R 10.75O1S
Cost of overtime stage 2 production:
CO 2 3.1O 2T 5.4O 2 H 4.3O 2 R 5.5O2 S
Cost of Subcontracted units - stage 1
CS 1 7.2S1T 12S1H 9.6S1R 12S1S
The total cost becomes
C CR1 CR 2 CO1 CO 2 CS 1
Constraints:
The first constraint is that the number of units of each tool in stage 1 and stage 2 should
be same.
R1T O1T S1T R 2T O 2T
Similarly, three more equations can be made for other tools, viz. Hoe, Rake and Shovel.
The second constraint is the sheet metal. The quantity of sheet metal used should be
less than or equal to the total available. Since, the metal is used in stage 1 only;
therefore, only stage 1 units are to be considered.
1.2 R1T O1T 1.6( R1H O1H ) 2.2 R1R O1R 1.5 R1S O1S 10000
The third constraint is to meet the sales contracted sales. The production unit for each
unit should be more than or equal to the contracted sales. The total number of units
produced of each kind of tool can either be calculated from 1st stage or from 2nd stage.
R 2T O 2T 1800
R 2 H O 2 H 1400
R 2 R O 2 R 1550
R 2S O 2S 1700
The final constraint is to meet the hours available for each operation.
For Regular Stamping Hours
0.04 R1T 0.18 R1H 0.06 R1R 0.14 R1S 500
For Regular Drilling Hours
0.05R1T 0.14 R1H 0.12 R1S 400
For Regular Assembly Hours
0.06 R 2T 0.11R 2 H 0.05 R2 R 0.11R2 S 600
For Regular Finishing Hours
0.05R 2T 0.21R 2 H 0.02 R2 R 0.13R2 S 550
For Regular Packaging Hours
0.03R 2T 0.18R 2 H 0.05R 2 R 0.10 R 2S 500
Similar hour constrains exist for overtime production
0.04O1T 0.18O1H 0.06O1R 0.14O1S 100
0.05O1T 0.14O1H 0.12O1S 100
0.06O 2T 0.11O 2 H 0.05O 2 R 0.11O 2 S 100
0.05O 2T 0.21O 2 H 0.02O 2 R 0.13O 2 S 100
0.03O 2T 0.18O 2 H 0.05O 2 R 0.10O2 S 100