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MBPF Inc. produces and sells mobile warehouses to consumers. MBPF’s production process consists of recurring and identical production/demand cycles. The consumer demand of mobile warehouse during a typical production/demand cycle is 600,000 units. During the first 12 weeks of a production/demand cycle, MBPF buys two essential parts (roof and base) form a part supplier, assembles them to a finished product (i.e., mobile warehouse), and sells it to consumers. Unit manufacturing cost is $100. In each week, approximately 50,000 pairs of roof/base parts are supplied by the part supplier (thus, 12 weeks total supply = 50,000 ´ 12weeks=600,000). Moreover, it costs MBPF a Fix Transportation Cost (FTC) =$800,000 (independent of the transportation batch size) each time a batch of 50,000 parts are delivered form the supplier’s warehouse to the MBPF’s production facility (thus, 1 production/demand cycle Total FTC =12weeks * $800,000). Assembly of a mobile warehouse is currently performed by three resources: Machine 1, Machine 2, and Assembly Machine (AM). Machine 1 prepares part Roof (involves activities R1, R2, R3) and Machine 2 prepares part Base (Activities B1 and B2). MBPF has 1,000 units of Machine 1 and 1,200 units of Machine 2. Finally, these two parts will be assembled by AM. MBPF has 1,200 units of AM. Assume that each resource of MBPF works 40 hours (scheduled availability) per week.


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