Find an optimal solution to western problem

Assignment Help Operation Management

Reference no: EM131152661

Western Chassis produces high-quality polished steel and aluminum sheeting and two lines of industrial chassis for the rack mounting of Internet routers, modems, and other telecommunications equipment. The contribution margin (contribution toward profit) for steel sheeting is $0.40 per pound and for aluminum sheeting is $0.60 per pound. Western earns $12 contribution on the sale of a Standard chassis rack and $15 contribution on a Deluxe chassis rack. During the next production cycle, Western can buy and use up to 26,000 pounds of raw unfinished steel either in sheeting or in chassis. Similarly, 20,500 pounds of aluminum are available. One standard chassis rack requires 16 pounds of steel and 8 pounds of aluminum. A Deluxe chassis rack requires 12 pounds of each metal. The output of metal sheeting is restricted only by the capacity of the polisher. For the next production cycle, the polisher can handle any mix of the two metals up to 4,000 pounds of metal sheeting. Chassis manufacture can be restricted by either metal stamping or assembly operations; no polishing is required. During the cycle no more than 2,500 total chassis can be stamped, and there will be 920 hours of assembly time available. The assembly time required is 24 minutes for the Standard chassis rack and 36 minutes for the Deluxe chassis rack. Finally, market conditions limit the number of Standard chassis racks sold to no more than 1,200 Standard and no more than 1,000 Deluxe. Any quantities of metal sheeting can be sold.

1) Find an optimal solution to Western's problem. What is the production plan, and what is the total profit?

2) An advertising agency has devised a marketing plan for the Western Chassis Company that will increase the market for Deluxe chassis. The plan will increase demand by 75 Deluxe chassis per month at a cost of $100 per month. Should Western adopt the plan? Briefly explain why.

Reference no: EM131152661

Questions Cloud

Health services instead of other traditional methods : You are a researcher interested in the attitudes of patients seeking care from integrative health care professionals. Your research question is "Why do patients seek integrative health services instead of other traditional methods?"

How does your firm actually conduct strategic planning : How does your firm actually conduct strategic planning? Who is involved in the process? How are customers involved in the process? Does your firm have a formal mission statement or vision statement

Discuss pros-cons of allowing companies to target children : Twenty-four percent of the U.S. population is under 18 years of age. This group of consumers wields billions of dollars in purchasing power. They are either making purchases themselves or they are affecting the purchases their parents make. Many comp..

Protection plan for the pbmc condominium association : Write a 1,400- to 1,750-word paper proposing a perimeter protection plan for the PBMC condominium association

Find an optimal solution to western problem : Western Chassis produces high-quality polished steel and aluminum sheeting and two lines of industrial chassis for the rack mounting of Internet routers, modems, and other telecommunications equipment. Find an optimal solution to Western's problem. W..

What quantity does the firm maximize profit : In Exhibit I-2, at what quantity does the firm maximize profit? Which of the following is NOT possible when a firm is maximizing its profits? When the firm's output level is zero, profit equals?

Identify and describe the stages of team development : Identify and describe the stages of team development. How might stronger team skills benefit you? How might you use teamwork skills in your job? Provide specific examples

Determine the maximum normal stress in the material : Use these results to determine the maximum normal stress in the material.

Complete the group communication competencies survey : Group Communication Competencies Survey and Summary, Complete the Material: Group Communication Competencies Survey

User Account

All Pages