Chapter 3.10, Problem 2P

Explanation of Solution

Cost minimization:

• Assume “${\text{p}}_{\text{m}}$” be the production during the month “m” and “${\text{i}}_{\text{m}}$” be the inventory at the end of the month “m”.
• The cost minimization “mincost” is formulated as follows,

${\text{mincost=13p}}_1+14{\text{p}}_2+15{\text{p}}_3+2{\text{i}}_1+2{\text{i}}_2+2{\text{i}}_3$

such that,

• All variables >= “0”.
• “${\text{i}}_1{\text{=p}}_1+5-20$” that denotes the inventory at the end of month “1”.
• “${\text{i}}_2{\text{=i}}_1{\text{+p}}_2-10$” that denotes inventory at the end of the month “2”