Eagle Furniture makes wooden rustic furniture. The major bottleneck in production is the time in the wood
Question:
Eagle Furniture makes wooden rustic furniture. The major bottleneck in production is the time in the wood cutting shop. The demand for the products exceeds the current capacity. There are two major product lines: chests and nightstands. The company has to decide which product line should get priority in production. Information about the product lines is provided below.
| Chest | Nightstand | |
| Selling price per unit | $1400 | $750 |
| Variable cost per unit | $800 | $490 |
| Required time in wood shop to produce 1 unit | 0.5 hours | 0.75 hours |
| Required time at polishing shop to produce 1 unit | 1.2 hours | 0.3 hours |
Monthly production hours available at the wood cutting station is 400 hours. Monthly production hours available at the polishing station is 440 hours. Use linear programming and Excel Solver to determine the optimal product mix. Answer the questions below accordingly.
(a) How many chests should be produced per month to maximize the total contribution margin?
(b) How many nightstands should be produced per month to maximize the total contribution margin?
Expert Answer:
To solve this problem using linear programming and Excel Solver we need to set up the objective func... View the full answer
