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Choose a production plan that maximizes contribution

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Reference no: EM13940918

Kaplan Computers manufactures high end computer systems for the graphics design industry. At the present time, the company makes three computers with the following characteristics:

 

Computer 1

Computer 2

Computer 3

Unit selling price

$12,000

$11,000

$10,000

Unit variable cost

7,000

8,500

8,000
       

The manufacture of the computers requires three major activities during their assembly. There is limited capacity for each resource. The following table shows the amount of each resource consumed by each computer and the capacity available of that resource.

 

 

Computer 1

 

Computer 2

 

Computer 3

 

Capacity

Resource A

3

4

6

24,000

Resource  B

5

6

2

36,000

Resource C

8

3

2

32,000

Additional resources are available, but need to be purchased in 1,000 unit increments.

Required:

Assume that demand for each product exceeds the capacity available. Choose a production plan that maximizes contribution.

Reference no: EM13940918

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