Question

MSA Computer Corporation manufactures two mod-

els of minicomputers, the Alpha 4 and the Beta 5. The

firm employs five technicians, working 160 hours

each per month, on its assembly line. Management

insists that full employment (i.e., all 160 hours of

time) be maintained for each worker during next

month’s operations. It requires 20 labor hours to

assemble each Alpha 4 computer and 25 labor hours

to assemble each Beta 5 model. MSA wants to see at

least 10 Alpha 4s and at least 15 Beta 5s produced

during the production period. Alpha 4s generate

$1,200 profit per unit, and Beta 5s yield $1,800 each.

Determine the most profitable number of each model

of minicomputer to produce during the coming

month.

Answer 1

Total Available Hours per month = 5 technicians * 160 hours per technician per month

Total Available Hours per month = 800 Hours

NOTE: We have limited hours, so will will use this time production of that product which is most benefial for us. However, we will also take care of the minimum production requirement of the other product.

DETERMINATION OF MOST PROFITABLE NUMBER OF MINI COMPUTER EACH MONTH

Particulars	Required Hrs / unit	Profit/ unit	Profit/ Hour	Minumum production	Hours for min. Production	Additional production in 225 Hours	Total Monthly production
a	b	c	d = c/b	e	f = e*b	g = 225 Hrs/b	h = e+g
Alpha 4	20	$1,200.00	$60.00	10	200	0	10
Beta 5	25	$1,800.00	$72.00	15	375	9	24
				Total	575	9	34

NOTES:-

1) We have maximum available 800 hours. we will use 200Hours for producing 10 units of Alpha 4 and 375 hours for producing 15 units of Beta 5 (Minimum Production)

2) Balance available 225 hours (800 - 575) will be used in producing 9 more units of Beta 5 because it has higer profit per hour.

3) Total optimum monthly production quantity will be "10 units of Alpha 4 and 24 units of Beta 5"

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