A company's products are enjoying a seller's market; hence, the company can sell as many units...
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A company's products are enjoying a seller's market; hence, the company can sell as many units of the products as it can produce. Furthermore, the amount the company can produce is small, relative to the overall market so the amount produced has no effect on market prices. The capacity constraints, together with cost and price data, are given below: Product 1 2 Selling Price (P per unit) 14 11 Cost of Production (P per unit) Production Period A 05 0.3 Available hours per quarter 500 10 8 Req'd Hrs. per Unit in Department The available company funds during the production period amount to P30,000. A bank loans up to P20,000 per quarter at an interest rate of 5 percent (0.05) per quarter provided the company's acid (quick) test ratio is at least 3 to 1 while the loan is outstanding. The acid-test ratio is given by the ratio of 1) cash on hand plus accounts receivable to 2) accounts payable. Next Period As depicted below, payments for labor and materials are made at the end of the production period (one quarter); hence, any needed credit is obtained at that point in time. Finally, sales revenue is received and outstanding liabilities (accounts payable) are paid off at the end of the next period. Time B 0.3 0.4 400 cost incurred and credit granted Formulate this problem as a linear programming model. Accounts receivable collected and Accounts payable liquidated C 0.2 0.1 200 A company's products are enjoying a seller's market; hence, the company can sell as many units of the products as it can produce. Furthermore, the amount the company can produce is small, relative to the overall market so the amount produced has no effect on market prices. The capacity constraints, together with cost and price data, are given below: Product 1 2 Selling Price (P per unit) 14 11 Cost of Production (P per unit) Production Period A 05 0.3 Available hours per quarter 500 10 8 Req'd Hrs. per Unit in Department The available company funds during the production period amount to P30,000. A bank loans up to P20,000 per quarter at an interest rate of 5 percent (0.05) per quarter provided the company's acid (quick) test ratio is at least 3 to 1 while the loan is outstanding. The acid-test ratio is given by the ratio of 1) cash on hand plus accounts receivable to 2) accounts payable. Next Period As depicted below, payments for labor and materials are made at the end of the production period (one quarter); hence, any needed credit is obtained at that point in time. Finally, sales revenue is received and outstanding liabilities (accounts payable) are paid off at the end of the next period. Time B 0.3 0.4 400 cost incurred and credit granted Formulate this problem as a linear programming model. Accounts receivable collected and Accounts payable liquidated C 0.2 0.1 200
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Related Book For
Matching Supply with Demand An Introduction to Operations Management
ISBN: 978-0073525204
3rd edition
Authors: Gerard Cachon, Christian Terwiesch
Posted Date:
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