One Energy, Inc. manufactures and sells portable solar generators. Its market is rapidly growing due to...
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One Energy, Inc. manufactures and sells portable solar generators. Its market is rapidly growing due to declining cost of solar panel technology and increased awareness of the environmental benefits of solar power. For the next production period there are four types of solar generators it can produce (Type I, II, III, and IV). All four are popular products in the market, and there is sufficient demand to sell every unit that it produces. The unit revenue ($) and unit cost ($) of each solar generator type are summarized below: Unit revenue Unit cost Resource Type I 1150 500 Silicon crystal (gram) Amorphous silicon (gram) Aluminum oxide (gram) The critical resources required to produce one unit of each type, as well as the amount available, are provided in the table below. Type l Type II 1140 490 1200 50 8 Type II 850 Type III 1200 560 4 Type III 750 Type IV 1000 425 17 Type IV 100 300 Amount Available 600000 150000 7350 Each unit of Type I and III generator can be assembled in 45 minutes. Each unit of Type II and IV generator can be assembled in 30 minutes. There are 450 labor hours available in assembly during the next production period, using their regular, salaried workforce. This salary cost must be paid regardless of production decisions. However, up to 250 additional hours of overtime can be scheduled and utilized at a cost of $20 per hour. There is also a $300 fixed administrative charge for any amount of overtime hours. Assume unlimited supplies (and sunk costs) for all other materials and resources such as utilities, etc. If the firm wants to manufacture Type I or II generators, it must use production line A. Production line A can be used to produce any combination or quantity of Type I and/or II generators. There is a fixed cost of $12,000 to set up production line A. If the firm wants to manufacture Type III or IV generators, it must use production line B. Production line B can be used to produce any combination or quantity of Type III and/or IV generators. There is a fixed cost of $15,000 to set up production line B. Management also wants to limit the maximum production quantity of each product type to 400 units. Formulate a spreadsheet model for this problem and then use Solver to solve and determine how many (if any) of each product type to produce in the next production run, which production line to set up, and if/how much overtime should be scheduled in order to maximize the total profit while satisfying all constraints. One Energy, Inc. manufactures and sells portable solar generators. Its market is rapidly growing due to declining cost of solar panel technology and increased awareness of the environmental benefits of solar power. For the next production period there are four types of solar generators it can produce (Type I, II, III, and IV). All four are popular products in the market, and there is sufficient demand to sell every unit that it produces. The unit revenue ($) and unit cost ($) of each solar generator type are summarized below: Unit revenue Unit cost Resource Type I 1150 500 Silicon crystal (gram) Amorphous silicon (gram) Aluminum oxide (gram) The critical resources required to produce one unit of each type, as well as the amount available, are provided in the table below. Type l Type II 1140 490 1200 50 8 Type II 850 Type III 1200 560 4 Type III 750 Type IV 1000 425 17 Type IV 100 300 Amount Available 600000 150000 7350 Each unit of Type I and III generator can be assembled in 45 minutes. Each unit of Type II and IV generator can be assembled in 30 minutes. There are 450 labor hours available in assembly during the next production period, using their regular, salaried workforce. This salary cost must be paid regardless of production decisions. However, up to 250 additional hours of overtime can be scheduled and utilized at a cost of $20 per hour. There is also a $300 fixed administrative charge for any amount of overtime hours. Assume unlimited supplies (and sunk costs) for all other materials and resources such as utilities, etc. If the firm wants to manufacture Type I or II generators, it must use production line A. Production line A can be used to produce any combination or quantity of Type I and/or II generators. There is a fixed cost of $12,000 to set up production line A. If the firm wants to manufacture Type III or IV generators, it must use production line B. Production line B can be used to produce any combination or quantity of Type III and/or IV generators. There is a fixed cost of $15,000 to set up production line B. Management also wants to limit the maximum production quantity of each product type to 400 units. Formulate a spreadsheet model for this problem and then use Solver to solve and determine how many (if any) of each product type to produce in the next production run, which production line to set up, and if/how much overtime should be scheduled in order to maximize the total profit while satisfying all constraints.
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To formulate a spreadsheet model for this linear programming problem you will need to set up variables for the amount of each product to produce the d... View the full answer
Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
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