A company is planning next month's production. It has to pay a setup cost to produce a batch of X₄'s so if it does produce a batch it wants to produce at least 100 units. Which of the following pairs of constraints show the relationship(s) between the setup variable Y₄ and the production quantity variable X₄? A) X₄ ≤ M₄Y₄, X₄ ≥ 100 B) X₄ ≤ M₄Y₄, X₄ = 100 Y₄ C) X₄ ≤ M₄Y₄, X₄ ≥ 100 Y₄ D) X₄ ≤ M₄Y₄, X₄ ≤ 100 Y₄

Question

Quizplus · Accepted Answer

The constraint X₄ ≥ 100 enforces the requirement that the company produces at least 100 units if it incurs the setup cost. The constraint X₄ ≤ M₄Y₄ limits production quantity by the capacity of the setup. This is consistent with the requirement that the company wants to produce at least 100 units if it incurs the setup cost. Therefore, choice C is the best choice.

A Company Is Planning Next Month's Production