Mack’s guitar fabrication shop produces low cost, highly durable guitars for beginners. Typically, out of the 100 guitars that begin production each month, only 80 percent are considered good enough to sell. The other 20 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for $300. Because some of the production process is automated, each guitar only requires 10 labor hours. Labor is paid at $10/hour, materials cost is $40/guitar, and overhead is $2,000. a) Calculate the labor and multifactor productivities. b) After some study, the operations manager recommends 3 options to improve the company’s multifactor productivity: (1) increase the sales price by 10 percent, (2) improve quality so that only 10 percent are defective, or (3) reduce labor, material, and overhead costs by 10 percent. Which option has the greatest impact on the multifactor productivity measure?

Mack’s guitar fabrication shop produces low cost, highly durable guitars for beginners. Typically, out of the 100 guitars that begin production each month, only 80 percent are considered good enough to sell. The other 20 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for $300. Because some of the production process is automated, each guitar only requires 10 labor hours. Labor is paid at $10/hour, materials cost is $40/guitar, and overhead is $2,000. a) Calculate the labor and multifactor productivities. b) After some study, the operations manager recommends 3 options to improve the company’s multifactor productivity: (1) increase the sales price by 10 percent, (2) improve quality so that only 10 percent are defective, or (3) reduce labor, material, and overhead costs by 10 percent. Which option has the greatest impact on the multifactor productivity measure?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 68P

See similar textbooks

Similar questions

Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.
A factory has two stations, station X and station Y. There are two different types of units, flow units A, and flow units B. The table below includes details about how long each unit type spends at each station: Flow Unit A Flow Unit B Station X 6 min 5 min Station Y 15 min 4 min The demand rate: Flow units A: 10 units per hour. Flow units B: 15 units per hour There are 4 machines at station X and 2 machine at station Y. What is the flow rate for unit B?
A company manufactures both mountain bikes and trail bikes. The cost of materials for a mountain bike is $60, and the cost of materials for a trail bike is $40. The cost of labor to manufacture a mountain bike is $80, and the cost of labor to manufacture a trail bike is $60. During a week in which the company has budgeted $1,800 for materials and $2,500 for labor, how many mountain bikes does the company plan to manufacture? mountain bikes
A company produces three different products; x,y, and z. For the production of 1 unit of product x, 1 unit of A and 1 unit of B are used as input. 1 unit of A and 2 units of B are used to produce 1 unit of product y. To produce 1 unit of product z, only 1 unit of A is used. The company holds 40 units of A and 20 units of B periodically in total. By the way, the company can not produce product y more than the twice of product z. On the other hand, the sale price of 1 unit of product x is 10 TL, product y is 15 TL and product z is 12 TL. Furthermore, the cost of 1 unit of product x is 8 TL, product y is 9 TL and product z is 7 TL. According to above information, what should be the company’s optimal product mix to maximize its profit? Construct the problem as a Linear programming model. Solve the above problem by using Simplex Method.
The Electrocomp Corporation manufactures two electrical products: air conditioners and large fans. The assembly process for each is similar in that both require a certain amount of wiring and drilling. Each air conditioner takes 3 hours of wiring and 2 hours of drilling. Each fan must go through 2 hours of wiring and 1 hour of drilling. During the next production period, 240 hours of wiring time are available and up to 140 hours of drilling time maybe used. Each air conditioner sold yields a profit of $25. Each fan assembled may be sold for a $15 profit. Formulate and solve this LP production mix situation to find the best combination of air conditioners and fans that yields the highest profit. Use the corner point graphical approach
A small firm makes three similar products, which all follow the same three-step process, consisting of milling, inspection, and drilling. Product A requires 12 minutes of milling, 5 minutes forinspection, and 10 minutes of drilling per unit; product B requires 10 minutes of milling, 4 minutesfor inspection, and 8 minutes of drilling per unit; and product C requires 8 minutes of milling, 4minutes for inspection, and 16 minutes of drilling. The department has 20 hours available duringthe next period for milling, 15 hours for inspection, and 24 hours for drilling. Product A contributes$2.40 per unit to profit, product B contributes $2.50 per unit, and product C contributes $3.00 perunit. Determine the optimal mix of products in terms of maximizing contribution to profits for theperiod. Then, find the range of optimality for the profit coefficient of each variable.
Each robot takes up a square area of 10 feet aside. To the left and to the right of each robot along each side are areas for work-in-process inventory that are 6 feet wide x 10 feet long, with the long side adjacent to the robot space. Robots are arranged on an aisle that is 14 feet wide; the area in the plant for the robots is rectangular, 212 feet long, and includes 20 feet and each end for lift trucks. Lift trucks are used to move work–in–process inventory and must be able to get to the robots from aisles on both sides. Assuming that 20 robots are needed, determine the area for robots, inventory control, and material handling. The outgoing inventory pallets are 6 feet x 8 feet high, and they can be stacked thee high. Outgoing inventory is kept for a minimum of two days. In addition to access for lift trucks, determine the amount of storage space that must be provided for these pallets.
Hi can I get help on this please? I am stuck!! Question: lumber and plywood. In a given week, the mill can turn out 400 units of production, of which at least 100 units of lumber and at least 150 units of plywood are required by regular customers. The profit is $25 per unit of lumber and $38 per unit of plywood. Assume that all units produced are sold. How many units of each should the mill produce in order to maximize the profit? What is the maximum profit?
1. A company produces three different products; x,y, and z. For the production of 1 unit of product x, 1 unit of A and 1 unit of B are used as input. 1 unit of A and 2 units of B are used to produce 1 unit of product y. To produce 1 unit of product z, only 1 unit of A is used. The company holds 40 units of A and 20 units of B periodically in total. By the way, the company can not produce product y more than the twice of product z. On the other hand, the sale price of 1 unit of product x is 10 TL, product y is 15 TL and product z is 12 TL. Furthermore, the cost of 1 unit of product x is 8 TL, product y is 9 TL and product z is 7 TL. According to above information, what should be the company’s optimal product mix to maximize its profit? Construct the problem as a LP model. 2. Solve the above problem by using Simplex Method. 3. Min Z = 0.4 x1 + 0.5 x2 Subject to 0.3 x1 +0.1 x2 ≤ 2.7 0.5x1 +0.5x2 = 6 0.6 x1 + 0.4x2 ≥ 6 x1 - 2x2 ≥ 0 x1, x2 ≥ 0 Create a problem and define the decision…
each Distributors packages and distributes industrial supplies. A standard shipment can be packaged in a class A container, a class K container, or a class T container. A single class A container yields a profit of $10; a class K container, a profit of $8; and a class T container, a profit of $12. Each shipment prepared requires a certain amount of packing material and a certain amount of time. Formulate and solve this problem using LP software. Resources Needed per Standard Shipment Class of Container Packing Material (pounds) Packing Time (hours) A 2 2 K 1 6 T 3 4 Total amount of resource available per week 120 pounds 210 hours Hugh Leach, head of the firm, must decide the optimal number of each class of container to pack each week. He is bound by the previously mentioned resource restrictions but also decides that he must keep his 6 full-time packers employed all 210 hours (6 workers × 35 hours)…
The Tiny Toy Company makes three types of new toys: the tiny tank, the tiny truck, and the tiny turtle. Plastic used in one unit of each is 1.5, 2.0 and 1.0 pounds, respectively. Rubber for one unit of each toy is 0.5, 0.5, and 1.0 pounds, respectively. Also, each tank uses 0.3 pounds of metal and the truck uses 0.6 pounds of metal during production. The average weekly availability for plastic is 16,000 pounds, 9,000 pounds of metal, and 5,000 pounds of rubber. It takes two hours of labor to make one tank, two hours for one truck, and one hour for a turtle. The company allows no more than 40 hours a week for production (priority #1). Finally, the cost of manufacturing one tank is $7, 1 truck is $5 and 1 turtle is $4; a target budget of $164,000 is initially used as a guideline for the company to follow. Minimize over-utilization of the weekly available supply of materials used in making the toys and place twice as much emphasis on the plastic (priority #2) Minimize the under and…
The Tiny Toy Company makes three types of new toys: the tiny tank, the tiny truck, and the tiny turtle. Plastic used in one unit of each is 1.5, 2.0 and 1.0 pounds, respectively. Rubber for one unit of each toy is 0.5, 0.5, and 1.0 pounds, respectively. Also, each tank uses 0.3 pounds of metal and the truck uses 0.6 pounds of metal during production. The average weekly availability for plastic is 16,000 pounds, 9,000 pounds of metal, and 5,000 pounds of rubber. It takes two hours of labor to make one tank, two hours for one truck, and one hour for a turtle. The company allows no more than 40 hours a week for production (priority #1). Finally, the cost of manufacturing one tank is $7, 1 truck is $5 and 1 turtle is $4; a target budget of $164,000 is initially used as a guideline for the company to follow. a) Minimize over-utilization of the weekly available supply of materials used in making the toys and place twice as much emphasis on the plastic (priority #2) b) Minimize the under…