Bramble ltd makes 2 different types of boots premier and

Reference no: EM13374181

Bramble Ltd makes 2 different types of boots, Premier and Champion, each using the same leather and the same skilled labour. The costs of the products per unit of production are as follows:

	Premier	Champion
	£	£
Selling price	80	60
Materials @ £8 per Kg	4	3
Labour @ £15 per hour	15	10
Other variable costs	12	8
Allocation of fixed costs	30	20

Profit per unit	19	19

The company is drawing up production plans for the 3 months to 30 June 2011. The anticipated maximum demand in the period is for 800 pairs of each type of boot.

There are only 630kg of material and 1500 hours of labour available in the period.

The company wishes to maximise profit in the period

Required

(a) Formulate a linear programming model for this problem.

(b) Prepare the initial tableau if the problem is to be solved using simplex

(d) What are the shadow prices of materials and labour? What do these prices mean?

(e) If new supplies of leather became available at £12 per kg should they be purchased? If so how much extra material should be bought?

(f) By how much would the contribution of champion boots have to increase by to change your decision in part (c)?

Reference no: EM13374181

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