Fisher Company produces two types of components for airplanes: A and B, with unit contribution margins of $400 and $600, respectively. The components pass through three sequential processes: cutting, welding, and assembly. Data pertaining to these processes and market demand are given below (weekly data).

Required:
1. Express Fisher Company€™s constrained optimization problem as a linear programming model.
2. Using a graphical approach, solve the linear programming model expressed in Requirement 1. Which constraints are binding?
3. What if Fisher Company had 10 additional machine hours (cutting) with all other resources held constant? What is the new optimal mix and associated total contribution margin? What is the incremental benefit per machine hour caused by the additional five hours, if any?

Transcribed Image Text:

Resource Usage (A) Six hours Ten hours Four hours One unit Zero units Resource Resource Available Cutting Welding Assembly Market demand (A) Market demand (B) 300 machine hours 308 welding hours 400 labor hours 50 40 Resource Usage (B) Ten hours Six hours Ten hours Zero units One unit