Question: Argoyle Electronics operates several plants for assembling components for computers. Because of differences in labor skills and wages, as well as differences in the amounts
Argoyle Electronics operates several plants for assembling components for computers. Because of differences in labor skills and wages, as well as differences in the amounts of automation at the different facilities, the standard times required to assemble the products and the profit margins vary with plant location and assembly line. Table below (i.e. the minutes required to produce one unit), line capacities (hours/week), maximum markets (units/week), and minimum deliveries the company has contracted to provide to its customers (units/week). Where should they be made, and what is the maximum weekly profit? Formulate LP. PRODUCT A PRODUCT B PRODUCT C Production Standard Marginal Standard Marginal Standard Marginal Line Capacity Facility Time Profit Time Profit Time Profit Plant Line Minutes/Unit $/unit Minutes/Unit $/unit Minutes/Unit $/unit Hours/Week W 1 6.0 4.20 15.0 6.10 3.0 3.00 40 W 2 7.2 3.50 18.0 5.25 4.2 2.50 40 X 1 3.0 6.25 6.0 8.25 * * 40 Y 1 * * 6.0 7.50 1.2 3.90 40 Y 2 3.0 6.00 * * 1.8 3.70 40 * Not applicable PRODUCT A PRODUCT B PRODUCT C Market Max. Contract Min. Market Max. Contract Min. Market Max. Contract Min. Units/ Week Units/ Week Units/ Week Units/ Week Units/ Week Units/ Week 120 700 1500 950 1000 600
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