2. The Willy Tonka Factory creates chocolate crunch bars and chocolate peanut bu

Question

2. The Willy Tonka Factory creates chocolate crunch bars and chocolate peanut butter bars. During any month, the Factory can make at most 100 pounds of bars. The cost to producea pound of chocolate bars and the demands for pounds of bars, which must be met on time, are listed in the table below. It costs $0.20 to hold a pound of chocolate crunch bars in inventory for one month and $0.10 to hold a pound of chocolate peanut butter bars in inventory for one month. Formulate an LP to minimize the total cost of mecting the next three months demands for chocolate bars. Table 2: Demands Month1 Month 2 Month 3 (lb) 60 50 Item (lb) (lb) Choc. Crunch 50 20 Choc. Peanut 20 Table 3: Cost of Production Item Month 1 Month 2 Month 3 (S/1b) (S/lb (S/b) 1.10 Choc. Crunch4.003.20 4.10 4.00 Choc. Peanut3.003.05

Explanation / Answer

The basic information on the changeover costs and minimum run size and run time was missing in the information provided.

Considering that there is no constraint in all the above parameters, I would produce the following

M1 - Choc crunch - 50 units - cost - 200

M2 - Choc crunch - 60 units - cost 246

M3 - Choc crunch - 55 units - cost 225.5

M1- Choc. peanut - 50 units - cost of production - 90, cost of inventory (additional for 30 units) - 3

M2- Choc peanut - 40 units - cost of production - 122 - cost of inventory (additional for 20 units) - 2

Total costs - 888.5

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