Par Inc., is a small manufacturer of golf equipment and supplies. Par's distributor believes a market exists for both a medium-priced golf bag, referred to as a standard model, and a high-priced golf bag, referred to as a deluxe model. The distributor is so confident of the market that, if Par can make the bags at a competitive price, the distributor will purchase all the bags that Par can manufacture over the next three months. A careful analysis of the manufacturing requirements resulted in the following table, which shows the production time requirements for the four required manufacturing operations and the accounting department's estimate of the profit contribution per bag: PRODUCTION TIME (HOURS) PRODUCT, CUT & DYE, SEWING, FINISHING, INSPECTION & PACKAGING, PROFIT/BAG STANDARD 7/10, 1/2, 1, 1/10, DELUXE 1, 5/6, 2/3, ¼ The director of manufacturing estimates that 630 hours of cutting and dyeing time, 300 hours of sewing time, 708 hours of finishing time, and 270 hours of inspection and packaging time will be available for the production of golf bags during the next three months. The accounting department arrived at prices for both bags that will result in a profit contribution1 of $20 for every standard bag and $39 for every deluxe bag produced. After you have run the solver again with the new numbers answer these question from your Answer and Sensitivity report. 4) How much you can increase the profit if you can increase Sewing time an hour? (Hint: Shadow Price) 5) If you can increase the available finalizing hours to 800 hours, do you need to change your production plan?
Par Inc., is a small manufacturer of golf equipment and supplies. Par's distributor believes a market exists for both a medium-priced golf bag, referred to as a standard model, and a high-priced golf bag, referred to as a deluxe model. The distributor is so confident of the market that, if Par can make the bags at a competitive price, the distributor will purchase all the bags that Par can manufacture over the next three months. A careful analysis of the manufacturing requirements resulted in the following table, which shows the production time requirements for the four required manufacturing operations and the accounting department's estimate of the profit contribution per bag:
PRODUCTION TIME (HOURS)
PRODUCT, CUT & DYE, SEWING, FINISHING, INSPECTION & PACKAGING, PROFIT/BAG
STANDARD 7/10, 1/2, 1, 1/10,
DELUXE 1, 5/6, 2/3, ¼
The director of manufacturing estimates that 630 hours of cutting and dyeing time, 300 hours of sewing time, 708 hours of finishing time, and 270 hours of inspection and packaging time will be available for the production of golf bags during the next three months.
The accounting department arrived at prices for both bags that
will result in a profit contribution1 of $20 for every standard bag
and $39 for every deluxe bag produced.
After you have run the solver again with the new numbers
answer these question from your Answer and Sensitivity report.
4) How much you can increase the profit if you can increase Sewing time
an hour? (Hint: Shadow Price)
5) If you can increase the available finalizing hours to 800 hours, do you
need to change your production plan?
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