Question: make an LP model based of off these direction: CASE 1 : Kootenay Straw Broom Company The Kootenay Straw Broom Company, located in British Co
make an LP model based of off these direction:
CASE : Kootenay Straw Broom Company
The Kootenay Straw Broom Company, located in British Co
Kootenay is a familyrun business, It considers the daily cost
lumbia, Canada, is a small, familyrun business that hand
of $ for its overhead and "family labor' of its members
makes two models of straw brooms, the Pioneer and the Her
as sunk costs required for the business. Kootenay is ready to
itage models, which are sold in "country stores" throughout
consider several options that could increase the daily profit:
Canada and the northwestern United States. Given its current production capacity and selling price, Kootenay is able to sell all the brooms it produces.
The Pioneer model is the company's basic model. It consists of a plain wooden handle, utilizes one pound of straw, and takes an average of minutes hours to make.
Kootenay sells them for $ each. The Heritage model is the companys deluxe model. Although the same wooden handies are used, they are run through a decorative lathe and attached to a larger base consisting of pounds of straw.
These two factors increase the production time of the Heritage broom to minutes hours and Kootenay sells them for $ each.
Kootenay receives daily deliveries of straw that is specially treated for their brooms from Tyler Farms. Tyler can supply Kootenay with up to pounds daily of the specially treated straw. This straw costs Kootenay S per pound.
Kootenay purchases its handles from Adhor Mills, which manufactures the handles according to Kootenay's specificatient mohes onis one day dour ato one mayor truck
capable of hauling boxes of handles each or handies Adhor charges Kootenay$ per box of for manufacture and delivery of the handles.
Adhor also makes a major delivery of products to a town miles from Kootenay and has offered to swing by Kootenay with one additional box of handles. However, the added expense for making this detour means that Kootenay would have to pay Adhor $ for this extra box of handles.
Kootenay averages production hours per day. Since
Seeking additional sources for treated straw
Taking Adhor Mills up on its offer to deliver an extra box. of handles for $
Adding a halftime worker four hours per day for $per day
Prepare a report for the Kootenay Straw Broom Company that evaluates the option or set of options it should implement. The report should:
Recommend an optimal production under current conditions.
Include a summary of the determination of unit profits of $ and $ respectively, for the Pioneer and Broom models, showing that the cost of both treated straw and broom handles are included in these calculations.
Show that after subtracting fixed costs, the business nets $ per day.
Give a brief analysis of the sensitivity of the objective function coefficients.
Analyze the options using the correct interpretation of the shadow prices considering which costs are included and which costs are sunk. Remmer Do not call them shadow prices in the report.
Use the rule te evaluate whether more than one option should be implemented. Calculations if shown. should be placed in an appendix.
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