Siyi Ltd is a specialist engineering firm that makes four
products, for which the following information is available:
A B C D
Selling price per unit £100 £64 £54 £62
Variable cost per unit £50 £40 £42 £30
Weekly demand (units) 40 70 50 80
Machine hours per unit 5 2 3 4
Due to a recent market boom, demand is now outstripping the
capacity of its plant, which is constrained to 500 hours machine
time per week. In the medium-term, the management will consider
expanding capacity but there remains a short-term problem of how to
allocate the available capacity among the four products.
Required:
A) Determine the optimising plan for using the available
machine hours in the short-term, and calculate the maximum
achievable contribution.
B) Calculate the shortfall in contribution imposed by the
constraint on machine hours, the maximum contribution in the
absence of a machine hour constraint, and how many additional
machine hours are required.