25. Better Products, Inc., manufactures three products on two machines. In a typical week, 40 hours are available on each machine. The profit contribution and production time in hours per unit are as follows: Category Product 1 Product 2 Product 3 Profit/unit $30 SS0 $20 Machine I time/unit 0.5 2.0 0.75 Machine 2 time/unit 1.0 1.0 0.5 Two operators are required for machine 1; thus, 2 hours of labor must be scheduled for each hour of machine 1 time. Only one operator is required for machine 2. A maximum of 100 labor-hours is available for assignment to the machines during the coming week. Other production requirements are that product 1 cannot account for more than 50% of the units produced and that product 3 must account for at least 20% of the units produced. a. How many units of each product should be produced to maximize the total profit contribution? What is the projected weekly profit associated with your solution? b. How many hours of production time will be scheduled on each machine? Page 134 c. What is the value of an additional hour of labor? d. Assume that labor capacity can be increased to 120 hours. Would you be interested in using the additional 20 hours available for this resource? Develop the optimal product mix assuming the extra hours are made available.
25. Better Products, Inc., manufactures three products on two machines. In a typical week, 40 hours are available on each machine. The profit contribution and production time in hours per unit are as follows: Category Product 1 Product 2 Product 3 Profit/unit $30 SS0 $20 Machine I time/unit 0.5 2.0 0.75 Machine 2 time/unit 1.0 1.0 0.5 Two operators are required for machine 1; thus, 2 hours of labor must be scheduled for each hour of machine 1 time. Only one operator is required for machine 2. A maximum of 100 labor-hours is available for assignment to the machines during the coming week. Other production requirements are that product 1 cannot account for more than 50% of the units produced and that product 3 must account for at least 20% of the units produced. a. How many units of each product should be produced to maximize the total profit contribution? What is the projected weekly profit associated with your solution? b. How many hours of production time will be scheduled on each machine? Page 134 c. What is the value of an additional hour of labor? d. Assume that labor capacity can be increased to 120 hours. Would you be interested in using the additional 20 hours available for this resource? Develop the optimal product mix assuming the extra hours are made available.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:25. Better Products, Inc., manufactures three products on two machines. In a typical week, 40 hours are available on each machine. The profit contribution and
production time in hours per unit are as follows:
Category
Product 1
Product 2
Product 3
Profit/unit
$30
$50
$20
Machine I time/unit
0.5
2.0
0.75
Machine 2 time/unit
1.0
1.0
0.5
Two operators are required for machine 1; thus, 2 hours of labor must be scheduled for each hour of machine 1 time. Only one operator is required for machine 2. A
maximum of 100 labor-hours is available for assignment to the machines during the coming week. Other production requirements are that product 1 cannot account
for more than 50% of the units produced and that product 3 must account for at least 20% of the units produced.
a. How many units of each product should be produced
solution?
maximize the total profit contribution? What is the projected weekly profit associated with your
b. How many hours of production time will be scheduled on each machine?
Page 134
c. What is the value of an additional hour of labor?
d. Assume that labor capacity can be increased to 120 hours. Would you be interested ín using the additional 20 hours available for this resource? Develop the
optimal product mix assuming the extra hours are made available.
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