Calculate the unit of omputer peripheral device, Basic Statistics

Northern Hi-Tec Electronics Limited manufactures six computer peripheral devices: internal modems, external modems, circuit boards, CD drives, hard disk drives, and memory boards. The assembly processes are dynamic and a small variation in the input can cause a large fluctuation in the output. As a result of this, Northern Hi-Tec E. Ltd. tests the computer peripheral devices. Each of these technical products requires time, in minutes, on four types of electronic testing equipment, as shown in the following table:

Table: The time required, in minutes, on the electronic testing equipment

1789_internal model.png

The first test device is available for 150 hours per week, the second device for 130 hours per week, the third device for 110 hours per week and the fourth device requires more preventive maintenance and may be used only for 102 hours each week. Northern Hi-Tec E. Ltd. Believes that the market for all six computer components is vast, and it can sell as many units of each product as it can manufacture. The table that follows summarises the selling price and material costs for each product:

BA2014 Coursework_Autumn_2011EMW Page 2

Table: Selling Prices and Material Costs per unit of the peripheral devices

1022_device selling prize.png

In addition, variable labour costs are £25 per hour for test device 1, £15 per hour for test device 2, £18 per hour for test device 3, and £12 per hour for test device 4. Northern Hi-Tec E. Ltd. Wants to maximise its profits.

a) Calculate the contribution per unit (profit margin) for each computer peripheral device. (Hint: calculate the variable labour cost per unit for each peripheral device then calculate total variable cost). Show your calculations clearly and explain your answer in the context of the problem.

b) Develop a linear programming model which allows Northern Hi-Tec E. Ltd. to determine how many computer peripheral devices should be produced to maximise profits assuming that all peripheral devices can be sold. The model formulation should include the following:

i. Definition of the decision variables,

ii. Identification and formulation of the objective function,

iii. Identification and formulation of the constraints.

c) Solve the model you developed in part (b) using Excel's Solver. Clearly state value of the objective function and the optimal solution in the context of the problem.

d) Identify which of the constraint(s) are binding and which are not-binding. How much slack (surplus) do the not-binding constraint(s) have? Be specific and give your answer in the context of the problem.

e) If a reduction of £10 was made to the profit margin of 'Internal Modem', how would the optimal solution and value of the objective function change? Be specific and give your answer in the context of the problem.

f) What is the value of an additional minute of time per week on test device 1? Test device 2?

Test device 3? and Test device 4? Should Northern Hi-Tec E. Ltd. add more test device time? If so, on which Test device?

g) Write a short business report (of 1000 words) to advice Northern Hi-Tec E. Ltd. for its management decision. You will discuss the decision variables, constraints, optimal solutions, value of the objective function, slack variables, evaluate impact of changes on variable labour costs (as in e) and the production level and combination of the peripheral devices that help Northern Hi-Tec E. Ltd. maximise its profits.

Posted Date: 3/14/2013 4:18:04 AM | Location : United States

Related Discussions:- Calculate the unit of omputer peripheral device, Assignment Help, Ask Question on Calculate the unit of omputer peripheral device, Get Answer, Expert's Help, Calculate the unit of omputer peripheral device Discussions

Write discussion on Calculate the unit of omputer peripheral device
Your posts are moderated
Related Questions
The initial research proposal will consist of the following SIX (6) items: 1. Identify a business research topic 2. Define the research questions for the identified problem or opp

Which date is used to record a credit card transaction? When a company uses its bank greeting cards, the transaction time frame is the time frame the bank greeting cards is used

What are the applications of measure of dispersion in civil engineering?

There are two firms competing in quantity. Firm 1 and 2 set their quantities supplied, q1 and q2, respectively. The production costs are zero. The market price is given by

A cognitive psychologists knows that concrete words, which easily evoke images (.e.g. "sunset", "truck") are easier to remember than abstract words, but she would like to know if t

A psychologist developed a test designed to help predict whether production-line workers in a large industry will perform satisfactorily. A test was administered to all new employe

the guinegog is a trader in portable cd-man. His budgeted output is 5000 units per quarter. The following data was available for the year 1998: Direct labour @ $6 Direct material @

Mention the characteristics of Statistics. Explain any two applications of Statistics.

Explain the Attribute Accounting Planning the accounting on foundation Producing, Explanation and outlining for customers is an art and if we consider as per technology, the sig

A methodical selection of the adequate, qualified evidential issue needed to verify the equity of management''s claims in the fiscal reports or to assess whether management has wis