Reference no: EM132545885

Question - 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.