Question: Consider the following weekly resource allocation problem faced by the production manager of XYZ Company. XYZ sells three types of computer; the PC (type X),

Consider the following weekly resource allocation

Consider the following weekly resource allocation problem faced by the production manager of XYZ Company. XYZ sells three types of computer; the PC (type X), the notebook computer (type Y ), and the workstation (type Z). The net profit from each is: Type X : \$350; Type Y: $470; and Type Z: $610, where net profit equals the sales price of each computer minus the direct costs of purchasing components, producing computer cases, and assembling and testing the computer. Assume that all production during any given week can and will be sold immediately. For a particular week, 120 hours are available on the Type A test equipment, where X and Y 's are tested, and 48 hours are available on the Type B test equipment, where Z's are tested. The testing of each computer takes one hour, regardless of type. Production is constrained by the availability of 2000 labor hours for product assembly. Each Type X takes 10 labor hours, type Y takes 15 labor hours and type Z takes 20 labor hours. Other activities have virtually unlimited resources. (i) Construct an LP model of this problem. (ii) Use the SOLVER in Excel to solve this problem. Interpret your output and answer the following questions. Please submit your supporting Excel spreadsheet. a) How many PCs, Notebook computers, and workstations should be produced? b) What is the optimal total profit? c) If you were given additional funding, where would you invest that money to increase your profit and why? (Hint: testing equipment? If so, which ones A, B or both? production labor? Both testing equipment and production labor? make sure to articulate the reason(s) for your investment decision, such as using sensitivity analysis.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!