Question: Can you help with this using simplex method spreadsheet model. Can you also let me know if a Big Number constraint is needed for this?
Can you help with this using simplex method spreadsheet model. Can you also let me know if a "Big Number" constraint is needed for this?
LG manufactures a variety of cellular and internet connected electronics. They have three models: (1) the Phone, a smartphone with OLED display, facial recognition, and triple-lens camera system; (2) the Watch, a smartwatch with OLED display, fitness tracking, and cellular connectivity; and (3) the Assistant, an internet-connected home speaker with voice assistant activated with the phrase Hey LG. All three are hot products in the market, and there is sufficient demand to sell every unit that can be produced. They are now planning how many of each of these products they should produce in their next production period. The OLED screens for the Phone and the Watch require a special machine to layer the displays into their rounded thin bezels. This machine would need to be leased if and only if any Phones and/or Watches are produced, and would cost $50,000 for the production period. There is one single machine available, and if leased, is capable of installing up to 2400 OLED screens in total (across the Phone and/or the Watch) during the production period. The Assistant requires a plastic molding machine that would need to be leased if and only if any Assistants are produced. This would cost $20,000 for the production run, and has effectively unlimited capacity (if leased). Each Phone, Watch, or Assistant sold yields $700, $350, and $250 revenue, respectively. The cost of the various components required to produce each Phone, Watch, and Assistant is $350, $150, and $100, respectively. Each Phone can be assembled in 45 minutes, each Watch in 24 minutes, and each Assistant in 15 minutes. There are 1200 labor hours available in assembly during the next production period, using their regular, salaried workforce. (You may consider the regular, salaried labor cost to be a sunk cost and ignore this cost in the model.) Up to 200 additional labor hours of overtime can be utilized at a cost of $24 per hour. Because of higher demand for the Watch than the Assistant, LG would like to produce at least 3 times as many Watches as Assistants. Set up and solve a linear programming spreadsheet model (with binary variables if needed) to decide how many (if any) of each product to produce in the next production run to maximize their profit.
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