Question: Bobby Brady has been nostalgic for his Big Wheel from the 1970s. As a result, he has decided to re-introduce this retro low-riding tricycle with
Bobby Brady has been nostalgic for his Big Wheel from the 1970s. As a result, he has decided to re-introduce this retro low-riding tricycle with its trademark blue, red, and yellow plastic to a new market. Big Wheels consist of three main parts: the handlebars steering assembly including the one large front wheel, the frame/seat, and two rear wheels. Since the idea's conception, Bobby has been promoting this launch on social media and the videos went viral. As a result, he already has orders for 10,000 Big Wheels so he needs to deliver on these orders. The production requirements are as follows:
| Requirements for Manufacturing | |||||
| PART | Materials | Time | Storage Space | Cost to Manufacture | Cost to Purchase |
| (in sq feet) | (in minutes) | (in cubic feet) | |||
| Handlebar, Steering, & Front Wheel | 4 | 13 | 3 | $19 | $22 |
| Frame & Seat | 5 | 15 | 3 | $16 | $18 |
| Rear Wheel (each) | 0.5 | 6 | 0.2 | $5 | $6 |
| Available | 130,000 | 290,000 | 89,000 | ||
Given the unexpectedly large quantity of initial orders, Bobby's manufacturing facility does not have the capacity to produce all of the parts in-house for the 10,000 existing orders. However, he does have the option of outsourcing any of the components from a reliable overseas manufacturer but the cost would be greater than manufacturing in-house as shown on the table. Write up the linear programming model to determine the optimal blend of producing in-house and/or outsourcing each of the major components to satisfy (or exceed) the 10,000 orders at a minimum cost. HINT: Two rear wheels are needed for each unit
Formulate the linear programming problem only. Be sure to define decision variables (HINT: create a decision variable for Handlebar/Steering(Manufacture), Handlebar/Steering (Purchase), Frame/Seat (Manufacture), Frame/Seat (Purchase), etc.), provide objective function, and all constraints. DO NOT SOLVE.
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Decision Variables Let HM Number of Handlebar Steering Front Wheel units to manufacture inhouse Let ... View full answer
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