Question

In: Operations Management

4. (20 pts) GA Industries manufactures handling equipment used in distribution centers. One product, called a...

4. (20 pts) GA Industries manufactures handling equipment used in distribution centers. One product, called a Liftmaster, has three components: a frame with strap, a motor and two supports. The most recent order has been for 4000 Liftmasters for next month. The sales and production departments must work together to determine delivery schedules. Although the processes used in the manufacture of the three components vary, there are three areas where the production manager is concerned about the availability of resources. These three areas, their usage by the three components, and their availability are detailed in the table.

Resource

Frame

Motor

Support

Available

Steel

32

7

12

54000 units

Cutting

26

15

9

35000 minutes

Shaping

25

11

5

28000 minutes

A quick look at the amounts available confirms that GA does not have the resources to fill this contract. A subcontractor, who can make an unlimited number of each of the three components, quotes the prices below.

Component

Subcontractor Cost

GA Cost

Frame

50

36

Motor

16

14

Support

8

6

The subcontractor requires that the minimum purchase of frame is 600. Due to their production capacity onstraint, the subcontractor can only supply up to 2500 motors.

Develop a linear programming model that would tell GA how to fill the order for 4000 Liftmasters at the minimum cost.

Solutions

Expert Solution

Decision Variables:

FM = units of frame manufactured

FP = units of frame procured

SM = units of support manufactured

SP = units of support procured

TM = units of motor manufactured

TP = units of motor procured

Formulation:

Min

$36*FM

+

$50*FP

+

$6*SM

+

$8*SP

+

$14*TM

+

$16*TP

s.t.

Steel required

32*FM

+

12*SM

+

7*TM

≤

54,000

Cutting minutes required

26*FM

+

9*SM

+

15*TM

≤

35000

Shaping minutes required

25*FM

+

5*SM

+

11*TM

≤

28000

Frames required

FM

+

FP

≥

4000

Support required

SM

+

SP

≥

8000

Motor required

TM

+

TP

≥

4000

Minimum purchase of frame

1*FP

>=

600

Maximum purchase of motors

1*TP

<=

2500

FM, FP, SM, SP, TM, TP ≥ 0

Excel Model:

Item

Manufactured

Purchased

Frame

460

3540

Support

0

8000

Motor

1500

2500

Total cost = $318,560

keosha answered 1 month ago
Next > < Previous

Related Solutions

Frandec Company manufactures, assembles, and rebuilds material handling equipment used in warehouses and distribution centers. One...
Frandec Company manufactures, assembles, and rebuilds material handling equipment used in warehouses and distribution centers. One product, called a Liftmaster, is assembled from four components: a frame, a motor, two supports, and a metal strap. Frandec’s production schedule calls for 4000 Liftmasters to be made next month. Frandec purchases the motors from an outside supplier, but the frames, supports, and straps may be either manufactured by the company or purchased from an outside supplier. Manufacturing and purchase costs per unit...
Exercise 9-4 Direct Materials Variances [LO9-4] Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of...
Exercise 9-4 Direct Materials Variances [LO9-4] Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,000 helmets, using 2,310 kilograms of plastic. The plastic cost the company $15,246. According to the standard cost card, each helmet should require 0.68 kilograms of plastic, at a cost of $7.00 per kilogram. Required: 1. What is the standard...
A linear programming computer package is needed. Frandec Company manufactures, assembles, and rebuilds material-handling equipment used...
A linear programming computer package is needed. Frandec Company manufactures, assembles, and rebuilds material-handling equipment used in warehouses and distribution centers. One product, called a Liftmaster, is assembled from four components: a frame, a motor, two supports, and a metal strap. Frandec's production schedule calls for 5,500 Liftmasters to be made next month. Frandec purchases the motors from an outside supplier, but the frames, supports, and straps may be either manufactured by the company or purchased from an outside supplier....
Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $20 million,...
Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $20 million, and production and sales will require an initial $5 million investment in net operating working capital. The company's tax rate is 40%. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000. $___ The company spent and expensed $150,000 on research related to the new project last year. Would this change your answer? -Select-...
Bandar Industries manufactures sporting equipment. One of the company’s products is a football helmet that requires...
Bandar Industries manufactures sporting equipment. One of the company’s products is a football helmet that requires special plastic. During the quarter ending June 30, the company manufactured 3,100 helmets, using 2,263 kilograms of plastic. The plastic cost the company $19,462. According to the standard cost card, each helmet should require 0.66 kilograms of plastic, at a cost of $9.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,100 helmets?...
Ivanhoe Industries manufactures sump-pumps. Its most popular product is called the Super Soaker, which has a...
Ivanhoe Industries manufactures sump-pumps. Its most popular product is called the Super Soaker, which has a retail price of $1,280 and costs $540 to manufacture. It sells the Super Soaker on a standalone basis directly to businesses. Ivanhoe also provides installation services for these commercial customers, who want an emergency pumping capability (with regular and back-up generator power) at their businesses. Ivanhoe also distributes the Super Soaker through a consignment agreement with Menards. Income data for the first quarter of...
Diversified Industries manufactures sump-pumps. Its most popular product is called the Super Soaker, which has a...
Diversified Industries manufactures sump-pumps. Its most popular product is called the Super Soaker, which has a retail price of $1,200 and costs $540 to manufacture. It sells the Super Soaker on a standalone basis directly to businesses. Diversified also provides installation services for these commercial customers, who want an emergency pumping capability (with regular and back-up generator power) at their businesses. Diversified also distributes the Super Soaker through a consignment agreement with Menards. Income data for the first quarter of...
Tec Industries manufactures and sells one product. The following information pertains to each of the company’s...
Tec Industries manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct Materials $ 35 Direct Labor $ 25 Variable manufacturing overhead $ 7 Variable Selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 125,000 During its first year of operations, BIA produced 40,000 units and sold 30,000 units. During its second year of...
Tec Industries manufactures and sells one product. The following information pertains to each of the company’s...
Tec Industries manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct Materials $ 35 Direct Labor $ 25 Variable manufacturing overhead $ 7 Variable Selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 125,000 During its first year of operations, BIA produced 40,000 units and sold 30,000 units. During its second year of...
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet...
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,800 helmets, using 2,774 kilograms of plastic. The plastic cost the company $18,308. According to the standard cost card, each helmet should require 0.68 kilograms of plastic, at a cost of $7.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ)...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT