Product Mix Data Answers Simple Lower bound TV Set Stereo Speaker

>=0 >=0 >=0

Simple Resource constraints TV Set + Stereo <= 450 TV Set <= 250 2*TV Set + 2*Stereo+Speaker 800 <= 2*TV Set + Stereo+Speaker 600 <=

Cash Planning
Answers Simple Lower Bound LTD STD Flow Constraints >= >= (in $000s) Simple Upper Bound 0 LTD <= 0 STD <= 400 300

LTD1+STD1 STD2 STD3

>= >= >=

150 Jan 450+.01*LTD1+.012*STD1 Feb .01*LTD1+.012*STD1+.012STD2+ March

Divisibility Assumption Each product is made up of five streams - Chassis, Picture, Speaker Cones, Power Supplies, Electronics However, while describing contraints, we have represented these linearily

r Supplies, Electronics

The final objective answer might be wrong, but the steps and process is correct. Taking consistently 50% of costs, shows a consistent bias in one way. As long as the model is correct, we can change the assu

s correct, we can change the assumptions, we can still reach the right number.

PARAMETERS
Month Cash Flow ($000s) Long-Term Loan Terms Maximum LTD ($000s) Interest LTD Short-Term Loan Terms Maximum STD ($000s) Interest STD Money market investment Interest MM Initial Balance Jan -150 Feb -450 Mar 0 Apr 500 May 250 Total 150

400 1%

per month, payable on the first of the month

300 in any month 1.20%

0.70% 0

Cash Planning
Simple Lower Bound LTD STD Flow Constraints

Answers (in $000s) Simple Upper Bound 0 LTD <= 0 STD <=

Objective:
400 300 Decisions Objective

>= >=

Cash left over

Jan Feb Mar Apr May at the end of May

>=

0 All months

STD LTD Cash flow STD interest/repayment outflow LTD interest/payment Total 300.00 400.00 -150.00 0.00 0.00 -150.00 300.00 -450.00 303.60 4.00 -142.40 300.00 0.00 303.60 4.00 307.60 300.00 500.00 303.60 404.00 1207.60 300.00 250.00 303.60 553.60 303.60

Projected Cash Flows

600 400 200 In $000s 0 Jan -200 -400 -600 Feb Mar Apr

Objective: finance cash flow requirements, so that the amount of money left at the end of May is maximized.

STD from Jan to May and LTD in Jan Maximize the leftover cash in the end Cash left over 550.00 711.45 1324.03 2840.90 3714.38 3740.39 Maximum Cash at the end of May

May

Parameters Unit Cost Production Annual Capacity

Plants Atlanta Louisville Detroit Phoenix

$ $ $ $

35.50 37.50 37.25 36.25

18,000 15,000 25,000 20,000

Plants Atlanta Louisville Detroit Phoenix

Tacoma

$ $ $ $

2.50 1.85 2.30 1.90

Tacoma

Demand

5,500

Production costs Shipping costs Total costs

Production decision Plants $ 2,619,350.00 Units produced $ 100,850.00 Atlanta 18000 $ 2,720,200.00 Louisville 15000 Detroit 18600 Phoenix 20000 Total 71600 Distribution decision Plants Tacoma San Diego Atlanta 0 0 Louisville 0 0 Detroit 0 0 Phoenix 5500 11500 Total 5500 11500

Plants Atlanta Louisville Detroit Phoenix Total Simple upper and Lower bounds: Selected Production Plant Capacity

Tacoma $ $ $ $ 10,450.00 $ 10,450.00

Distribution costs San Diego $ $ $ $ 10,350.00 $ 10,350.00

>=

Selected Distribution Demand

Flow Constraints: Cost of production + Shipping should be Minimum Resource Constraints: Capacity Constraint for production house. 1

Unit Shipping Cost Warehouses San Diego Dallas Denver St.Louis Tampa Baltimore

$ $ $ $

2.75 1.90 2.25 0.90

$ $ $ $

1.75 1.50 1.85 1.60

Dallas

$ $ $ $

2.00 1.60 1.25 1.75

$ $ $ $

2.10 1.00 1.50 2.00

$ $ $ $

1.80 1.90 2.25 2.50

Tampa

$ $ $ $

1.65 1.85 2.00 2.65

Baltimore

San Diego

Demand Forecast Denver St.Louis

11,500

10,500

9,600

15,400

12,500

6,600

Production calculations Plants Production cost Atlanta ######### Louisville ######### Detroit ######### Phoenix ######### Total costs ######### Warehouses Dallas Denver St.Louis 0 0 0 0 0 15000 7500 9600 400 3000 0 0 10500 9600 15400

Tampa 12500 0 0 0 12500

Baltimore Total 5500 0 1100 0 6600

18000 15000 18600 20000

Distribution costs for individual warehouses Dallas Denver St.Louis Tampa $ $ $ $ 22,500.00 $ $ $ 15,000.00 $ $ 13,875.00 $ 12,000.00 $ 600.00 $ $ 4,800.00 $ $ $ $ 18,675.00 $ 12,000.00 $ 15,600.00 $ 22,500.00

Baltimore Total $ 9,075.00 $ 31,575.00 $ $ 15,000.00 $ 2,200.00 $ 28,675.00 $ $ 25,600.00 $ 11,275.00 $ 100,850.00

elected Distribution Demand