Solos Furniture Company makes only three kinds of furnitures (chairs, desks and tables). Each product requires some
Question:
Solo’s Furniture Company makes only three kinds of furnitures (chairs, desks and tables). Each product requires some labor in the parts fabrication department, the assembly department, and the shipping department. The furniture is sold through a local distributor who has Estimated the maximum potential sales for each product in the next quarter. Finally, the accounting department has provided some data showing the profit contributions of each product. The decision problem is to determine the product mix, that is, to maximize Solo’s Furniture Company’s profit for the quarter by choosing production quantities for the chairs, desks, and tables. The table below summarises the parameters of the problems.
Hours per Unit
Department Chairs Desks Tables Hours Available
Fabrication 4 6 2 1,850
- What would happen if the profit contribution for chairs reaches $16.00 and subsequently when it reaches $21.00? Show tabulated results and working
- From your answer, you realize that fabrication time limits your ability to increase profits. Maybe we should acquire more of it. How much should we pay for additional time?
Assembly 3 5 7 2,400
Shipping 3 2 4 1,500
Demand Potential 360 300 100
Profit $15 $24 $18
Managerial Decision Modeling with Spreadsheets
ISBN: 978-0136115830
3rd edition
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair