Time Saver Meals, Inc., offers monthly service plans providing prepared meals that are delivered to the customers
Question:
For planning purposes, management uses linear programming to determine the most profitable number of Premier Cuisine and Haute Cuisine monthly meal plans to produce.
Required:
1. Using the notation P for Premier Cuisine and H for Haute Cuisine, state the objective function and the constraints that management should use to maximize the total contribution margin generated by the monthly meal plans.
2. Graph the constraints on the meal preparation process. Be sure to clearly label the graph.
3. Using the graph prepared in requirement (2), determine the optimal solution to the companys production planning problem in terms of the number of each type of meal plan to produce.
4. Calculate the value of the objective function at the optimal solution.
5. If the constraint on preparation time could be eliminated, determine the revised optimal solution.
(CMA,adapted)
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
Step by Step Answer:
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078025662
10th edition
Authors: Ronald Hilton, David Platt