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Quot Boralis Manufacture Backpacks For Serious Hikers The Demand For Its Product


“Boralis manufacture backpacks for serious hikers. The demandfor its product occurs during March to June of each year. Boralisestimates the demand for the four months to be 100, 200, 180,and 300 units, respectively. The company uses part-time laborto manufacture the backpacks and, accordingly, its productioncapacity varies monthly. It is estimated that Boralis can produce50, 150, 280, and 270 units in March through June. A currentmonth’s demand may be satis¯ed in one of three ways:1. Current month’s production.2. Surplus production in an earlier month.3. Surplus production in a later month (backordering).In the ¯rst case, the production cost per backpack is $40. Thesecond case incurs an additional holding cost of $.50 per back-pack per month. In the third case, an additional penalty costof $2.00 per backpack is incurred for each month delay. Boraliswishes to determine the optimal production schedule for the fourmonths”


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