The New England Cycle Company is planning next month's production of its two bicycles: its B2 tandem

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The New England Cycle Company is planning next month's production of its two bicycles: its B2 tandem cycle built for two and its S10 single-rider 10-speed model. Both models use the same seats and tires. Management has been informed that 2000 seats, 1000 gear assemblies (only the S10 requires a gear assembly), and 2400 tires are available next month for production. On the average, it takes two hours to produce a B2 and three hours to produce a S10 bicycle. The accounting department estimates that each B2 yields a profit of $40 and each S10 yields a profit of $100.
Management has set the following prioritized goals:
Priority 1: Fulfill a contract for 400 B2 bicycles that it promised to deliver to vendors in Ocean City, MD next month.
Priority 2: Produce at least 1000 total bicycles during the month
Priority 3: (1) Achieve at least $100,000 profit for the month; (2) use no more than 1600 labor-hours during a month.
Each $1000 short of $100,000 goal is considered 30 times as important as utilizing an extra labor-hour.
Priority 4: The Company is developing a new cycle, so it would like to have: (1) at least 200 tires left over at the end of the month, (2) at least 100 gear assemblies left over at the end of the month.
Each leftover gear assembly is deemed twice as important as a leftover tire.
Management wants to determine the production schedule that best meets its prioritized objectives.
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OM operations management

ISBN: 978-1285451374

5th edition

Authors: David Alan Collier, James R. Evans

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