A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units, and in period 2, demand is 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. If holding costs are $6 per unit each period, how many hours of regular employment should be used in period 1? (Assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour.)
A) 100
B) 125
C) 150
D) 50
E) none of these

Question

Quizplus · Accepted Answer

To meet the demand at the lowest possible cost, the manager should use all available regular hours in period 1, which is 125 hours, because regular hours are cheaper than overtime hours. This approach minimizes the cost while ensuring demand is met.

A Manager Is Applying the Transportation Model of Linear Programming