An electronics company is engaged in the production of two components C and C, used in...

 

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An electronics company is engaged in the production of two components C₁ and C₂, used in radio sets. Each unit of C₁ costs the company 5 in wages and 5 in materials, while each unit of C₂ costs the company * 25 in wages and 15 in materials. The company sells both products on one-period credit terms, but the company's labour and material expenses must be paid in cash. The selling price of C₁ is * 30 per unit and of C₂ it is 70. Because of the strong monopoly of the company for these components, it is assumed that the company can sell at the prevailing prices as many units as it produces. The company's production capacity is, however, limited by two considerations. First, at the beginning of period 1, the company has initial balance of 4,000 (cash plus bank credit plus collections from past credit sales). Secondly, the company has available, in each period, 2,000 hours of machine time and 1,400 hours of assembly time. The production of each C₁ requires three hours of machine time and two hours of assembly time, whereas the production of each C₂ requires two hours of machine time and three hours of assembly time. Formulate the above problem as a linear programming problem. An electronics company is engaged in the production of two components C₁ and C₂, used in radio sets. Each unit of C₁ costs the company 5 in wages and 5 in materials, while each unit of C₂ costs the company * 25 in wages and 15 in materials. The company sells both products on one-period credit terms, but the company's labour and material expenses must be paid in cash. The selling price of C₁ is * 30 per unit and of C₂ it is 70. Because of the strong monopoly of the company for these components, it is assumed that the company can sell at the prevailing prices as many units as it produces. The company's production capacity is, however, limited by two considerations. First, at the beginning of period 1, the company has initial balance of 4,000 (cash plus bank credit plus collections from past credit sales). Secondly, the company has available, in each period, 2,000 hours of machine time and 1,400 hours of assembly time. The production of each C₁ requires three hours of machine time and two hours of assembly time, whereas the production of each C₂ requires two hours of machine time and three hours of assembly time. Formulate the above problem as a linear programming problem.

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