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Question
APC Company is able to produce four products and is planning its production mix for the following period. The relevant data is given below.
A B C D $ $ $ $
Selling price per unit 19 20 40 50
Labour cost per unit 6 12 18 24
Material cost 9 9 15 16
Maximum Demand (units) 1,000 5,000 4,000 2,000
Labour is paid $6 per hour and labour hours are limited to 12,000 hours in the period.
a. Determine the optimal production plan and calculate total contribution it earns for the APC Company.
b. Briefly explain other factors that should be considered in determining the optimum production mix under limiting factor decision situation.
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