Question

5. Jamestown Furniture Co. is a small, but fast-growing manufacturer of living room furniture. Its two principal products are end tables and sofas. There are five processes in the manufacturing at Jamestown: Cutting the lumber, cutting the fabric, sanding, staining, and assembly. Jamestown has one employee working in fabric cutting and one employee working in staining. These are relatively skilled workers and could be replaced only with some difficulty. The cutting and sanding operations are performed by two workers each, and while there is some skill to these operations, it is less critical than for staining and for fabric cutting. Assembly is the least skill-based process and is currently done by one full-time employee and a group of part timers who provide a total of 175 minutes of working time per week. The other employees work a 40-hour week, with 5 hours off for breaks, training, and personal time. Assume a fourweek month, and that by prior agreement, any of the employees can be switched from one task to another.

The current demand for Jamestown's products and sales prices are provided below. Jamestown expects demand to increase significantly in the coming months (this depends on whether it is able to successfully obtain the order it is negotiating to get from a motel chain). The materials cost for the table is $150 and $275 for the sofa.

	End Tables	Sofas
Price	$500	$800
Current demand (units per month)	250	150

The time required for each activity and the total time available are shown below.

	Required time for Table	Required time for Sofas	Required total time	Hours Available	Slack TIme
Cut	150	45	195	280	85
Sand	100	30	130	280	150
Assemble	125	225	350	700	350
Stain	250	120	370	280	-90
Cut Fabric	0	90	90	140	50

Required:

What is the most profitable production plan for Jamestown? Explain your answer with supporting Calculations.

Answer 1

given data

particulars	demand	price	material cost
table	250	500	150
sofa	150	800	275

calculation of required time for table :

time for complete a work for table = required time for work / total demand

the demand of the table is 250 and time for cutting the table is 150

therefore time for cut a table = 150 / 250 = 0.6

similarly, sand = 100 / 250 = 0.4

assemble =125 / 250 = 0.5

stain = 250 / 250 = 1

calculation of required time for sofa :

time for complete a work for sofa = required time for work / total demand

demand for sofa is 150

cut = 45 / 150 = 0.3

sand = 30 / 150 = 0.2

assemble = 225 / 150 = 1.5

stain = 120 / 150 = 0.8

cut fabric = 90 / 150 = 0.6

identifying the most profitable prodect :

particulars	table	sofa
price	500	800
less : material cost	(150)	(275)
margin	350	525
constraint time (stain )	1	0.8
through put per hour (margin / constraint time)	350	656.25

therefore. the most profitable production plan for jamestown is SOFA.

SOFA is the most profitable plan.