Question

In: Finance

Andalus Furniture Company has two manufacturing plants, one at Aynor and another at Spartanburg.

Problem 12-27 (Algorithmic)

Andalus Furniture Company has two manufacturing plants, one at Aynor and another at Spartanburg. The cost in dollars of producing a kitchen chair at each of the two plants is given here.

Aynor: Cost = 80Q1 + 5Q12 + 106
Spartanburg: Cost = 28Q2 + 3Q22 + 158

Where

Q1 = number of chairs produced at Aynor

Q2= number of chairs produced at Spartanburg

Andalus needs to manufacture a total of 30 kitchen chairs to meet an order just received. How many chairs should be made at Aynor and how many should be made at Spartanburg in order to minimize total production cost? When required, round your answers to the nearest dollar.

The optimal solution is to produce  chairs at Aynor for a cost of $   and  chairs at Spartanburg for a cost of $  . The total cost is $  .

Solutions

Expert Solution

Used Excel solver to solve this minimization of cost problem with the constraints provided.

On using solver, we get as the optimal solution is to produce 8 chairs at Aynor for a cost of $1066 and 22 chairs at Spartanburg for a cost of $2226. The total cost is $3292


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