Problem 8.0.1 (Problem 2 (page 398) in text[1]:) The management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability:

Product(hours/unit) Labor-Hours

Department

2 Avaialable

0.35 100 0.20 36 0.50 50

1

A 1.00

B 0.30

C 0.20

Profit

Contribution/unit $30.00 $15.00

1. Develop a linear programming model of the Hartman Company problem. Solve the model to determine the optimal production quantities of products 1 and 2.

2. In computing the profit contribution per unit, management doesnt deduct labor costs because they are considered fixed for the upcoming planning period. However, suppose that overtime can be scheduled in some of the departments. Which departments would you recommend scheduling for overtime? How much would you be willing to pay per

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BUSI 2013 FALL 2020 hour of overtime in each department?

3. Suppose 10,6 and 8 hours of overtime may be scheduled in departments A, B and C, respectively. The cost per hour of overtime $18 in department A, $22.5 in department B and $12 in department C. Formulate a linear programming model that can be used to determine the optimal production quantities if overtime is made available. What are the optimal production quantities, and what is the revised total contribution to profit? How much overtime do you recommend in each department? What is the increase in total contribution to profit if overtime is used?