Find the process that maximizes profit per day

Reference no: EM131136910

A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing, and the parameters of each process are as follows:

	Process 1	Process 2
Production rate	35 parts/hour	15 parts/hour
Daily production time	4 hours/day	7 hours/day
Percent of parts	20%	9%
rejected based on
visual inspection

Assume that the daily demand for hubs allows all defect-free hubs to be sold. Additionally, tested or rejected hubs cannot be sold.

Find the process that maximizes profit per day if each part is made from $4 worth of material and can be sold for $30. Both processes are fully automated, and variable overhead cost is charged at the rate of $40 per hour. (2.4)

Reference no: EM131136910

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