The Westerbeck Company manufactures several models of automatic washers and dryers. The projected requirements (demand) over the next year for their washers and dryers are Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Demand 800 1030 810 900 950 1340 1100 1210 600 580 890 1000
Current inventory is 100 units. The firm’s current capacity is 960 units per month. The average salary of production workers is $1,280 per month. Overtime is paid at time and a half up to 20 percent additional time. Each production worker accounts for 30 units per month. Additional labor can be hired for a training cost of $250, and existing workers can be laid off at a cost of $500. Any increase or decrease in the production rate costs $5,000 for tooling, setup, and line changes. This does not apply, however, to overtime. Inventory-holding costs are $25 per unit per month. Lost sales are valued at $75 per unit. You may assume an equivalent of 160 hours (regular time) in a month per worker. Formulate a linear programming model that minimizes total cost of production.