Wood and Leather (WL) makes two types of accent chairs using skilled artisans (labour) and a...

  

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Wood and Leather (WL) makes two types of accent chairs using skilled artisans (labour) and a unique type of leather (material). Both the artisans and the leather are in short supply and so the accountant of WL has correctly produced a linear programming model to held decide optimal production mix. Unfortunately, he resigned his position soon after and as the new accountant you must reconstruct the model from the following information provided. (i) The company must decide on the number of Worrell accent chairs and Larrett Accent chairs to manufacture and sell. (ii) The table below reflects the limitation in supply of resources for the artisans' time and the leather used to manufacture the chairs. Artisans' time Leather Worrell Larrett Total available 3,500 hours 7 hours/unit 5 hours/unit 1,200 meters 2 meters/ 2 meters/ unit unit (iii) Based on market research done recently, market demand for the Worrell does not exceed 400 units. (iv) Projected selling prices and relevant variable cost information is given in the table below. Selling price Total variable cost per unit Worrell $344 $296 Larrett $260 $220 (v) While reviewing the documents of the previous accountant, it was discovered that he had already constructed the graph to resolve the decision. This is given below. 800 600 400 240 200 ----- Feasible region Optimal point Cont 200 400 600 800 Required: (a) Identify the variables. (2 marks) (b) Identify the objective function. (3 marks) (c) Identify all possible constraints needed to resolved this decision. (d) Referring to the graph, indicate the feasible region. (e) Determine the optimal product mix. (8 marks) (1 mark) X (f) What is the maximum contribution that will be earned by Wood&Leather? (3 marks) (g) Determine the shadow price of leather and the artisans' times. (6 marks) L D E- #% 1. P Suder (2 marks) LJ Wood and Leather (WL) makes two types of accent chairs using skilled artisans (labour) and a unique type of leather (material). Both the artisans and the leather are in short supply and so the accountant of WL has correctly produced a linear programming model to held decide optimal production mix. Unfortunately, he resigned his position soon after and as the new accountant you must reconstruct the model from the following information provided. (i) The company must decide on the number of Worrell accent chairs and Larrett Accent chairs to manufacture and sell. (ii) The table below reflects the limitation in supply of resources for the artisans' time and the leather used to manufacture the chairs. Artisans' time Leather Worrell Larrett Total available 3,500 hours 7 hours/unit 5 hours/unit 1,200 meters 2 meters/ 2 meters/ unit unit (iii) Based on market research done recently, market demand for the Worrell does not exceed 400 units. (iv) Projected selling prices and relevant variable cost information is given in the table below. Selling price Total variable cost per unit Worrell $344 $296 Larrett $260 $220 (v) While reviewing the documents of the previous accountant, it was discovered that he had already constructed the graph to resolve the decision. This is given below. 800 600 400 240 200 ----- Feasible region Optimal point Cont 200 400 600 800 Required: (a) Identify the variables. (2 marks) (b) Identify the objective function. (3 marks) (c) Identify all possible constraints needed to resolved this decision. (d) Referring to the graph, indicate the feasible region. (e) Determine the optimal product mix. (8 marks) (1 mark) X (f) What is the maximum contribution that will be earned by Wood&Leather? (3 marks) (g) Determine the shadow price of leather and the artisans' times. (6 marks) L D E- #% 1. P Suder (2 marks) LJ

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Stepbystep Explanation a Identify the varriables Quantity on the horizontal axis Price on the ver... View the full answer