1. Fantastic Homeware produces three sizes of quilts (single, queen, and king size) that it markets...

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1. Fantastic Homeware produces three sizes of quilts (single, queen, and king size) that it markets to major retail establishments throughout the country. Due to contracts with these establishments, Fantastic Homeware must produce at least 120 of each size quilt daily. It pays $0.50 per pound for stuffing and $0.20 per square foot for quilt fabric used in the production of the quilts. It can obtain up to 2,700 pounds of stuffing and 48,000 square feet of quilted fabric from its suppliers. Labor is considered a fixed cost for Fantastic Homeware. It has enough labor to provide 50 hours of cutting time and 200 hours of sewing time daily. The following table gives the unit material and labor required as well as the selling price to the retail stores for each size quilt. Single Queen King Stuffing (pounds) Quilt Fabric (sq.ft.) Cutting Time (min) Sewing Time (min) 55 75 95 4 6 5 6 Table 1: Fantastic Homeware data. 6 8 Selling Price ($) 19 26 32 (a) Determine the daily production schedule that maximizes total daily gross profit (= selling price material costs.). How much of the available daily material and labor resources would be used by this production schedule? (b) What is the lowest selling price for queen size quilts that Fantastic Homeware could charge while maintaining the optimal production schedule recommended in part (a)? 1. Fantastic Homeware produces three sizes of quilts (single, queen, and king size) that it markets to major retail establishments throughout the country. Due to contracts with these establishments, Fantastic Homeware must produce at least 120 of each size quilt daily. It pays $0.50 per pound for stuffing and $0.20 per square foot for quilt fabric used in the production of the quilts. It can obtain up to 2,700 pounds of stuffing and 48,000 square feet of quilted fabric from its suppliers. Labor is considered a fixed cost for Fantastic Homeware. It has enough labor to provide 50 hours of cutting time and 200 hours of sewing time daily. The following table gives the unit material and labor required as well as the selling price to the retail stores for each size quilt. Single Queen King Stuffing (pounds) Quilt Fabric (sq.ft.) Cutting Time (min) Sewing Time (min) 55 75 95 4 6 5 6 Table 1: Fantastic Homeware data. 6 8 Selling Price ($) 19 26 32 (a) Determine the daily production schedule that maximizes total daily gross profit (= selling price material costs.). How much of the available daily material and labor resources would be used by this production schedule? (b) What is the lowest selling price for queen size quilts that Fantastic Homeware could charge while maintaining the optimal production schedule recommended in part (a)?

Answer rating: 100% (QA)

Solution a To determine the daily production schedule that maximizes total daily gross profit we need to find the optimal production levels for each size quilt that maximize the difference between the ... View the full answer