Manufacture to maximize the total profit contribution

Assignment Help Financial Management

Reference no: EM131825322

Expedition Outfitters manufactures a variety of specialty clothing for hiking, skiing, and mountain climbing. Its management decided to begin production on two new parkas designed for use in extremely cold weather: the Mount Everest Parka and the Rocky Mountain Parka. The manufacturing plant has 120 hours of cutting time and 120 hours of sewing time available for producing these two parkas. Each Mount Everest Parka requires 30 minutes of cutting time and 45 minutes of sewing time, and each Rocky Mountain Parka requires 20 minutes of cutting time and 15 minutes of sewing time. The labor and material cost is $150 for each Mount Everest Parka and $50 for each Rocky Mountain Parka, and the retail prices through the firm’s mail order catalog are $250 for the Mount Everest Parka and $200 for the Rocky Mountain Parka. Because management believes that the Mount Everest Parka is a unique coat that will enhance the image of the firm, they specified that at least 20% of the total production must consist of this model. Assuming that Expedition Outfitters can sell as many coats of each type as it can produce, how many units of each model should it manufacture to maximize the total profit contribution?

Reference no: EM131825322

Questions Cloud

Investment annual rate of return risk : Because cash is held in money market fund, annual return is lower. What is the annual rate of return and the total risk for the optimal portfolio?

Use falsification exercise : To test you findings, you use a “falsification exercise”, you observe the new car purchasing behavior of families with children graduating in 2015.

What effect would it have on next year earnings : What effect would a $9.82 million operating expense have on this year's earnings? What effect would it have on next year's earnings?

What impact will the cost of the purchase have on earnings : What impact will the cost of the purchase have on earnings for each of the next four? years?

Manufacture to maximize the total profit contribution : How many units of each model should it manufacture to maximize the total profit contribution?

Define the stated or quoted or nominal rate-periodic rate : Define the stated, or quoted, or nominal rate, the periodic rate and the effective annual rate.

Prepare budget for this year for administrative depart : Prepare a budget for this year for the Administrative Department at Tom’s Toyota Company based on the following information:

Total cash collections : what will be Big Bob's total cash collections in the month of June?

Linear programming problem : Consider the following linear programming problem. Find the optimal solution using the graphical solution procedure.

User Account

All Pages