Question: Toolco has contracted with AutoMate to supply their automotive discount stores with wrenches and chisels. AutoMates weekly demand is for 1500 wrenches and 1200 chisels.

Toolco has contracted with AutoMate to supply their automotive discount stores with wrenches and chisels. AutoMate’s weekly demand is for 1500 wrenches and 1200 chisels. Toolco’s present one-shift capacity is not large enough to produce the requested units and they must resort to overtime and possibly subcontracting with other tool shops to meet the demand. These alternatives result in an increase in the production cost per unit, as shown in the following table.

Tool	Production Type	Weekly Production Range (units)	Unit Cost ($)
Wrenches	Regular	0-550	2.00
	Overtime	551-800	2.80
	Subcontracting	801-¥	3.00
Chisel	Regular	0-620	2.10
	Overtime	621-900	3.20
	Subcontracting	901-¥	4.20

Formulate and solve the LP for the minimum cost production schedule for each tool.

What is the effect on the total weekly production cost of increasing the regular and overtime capacities for each tool by one unit?

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