Discussion on the rate of pay requested

Assignment Help Operation Management

Reference no: EM131851790

Lim Co. manufactures and sells standard and distinctive cues. Both of these cues use the same type of good quality ash. The supply of ash is restricted to 5500kg per period. Ash costs RM50 per kg.

The cues are made by skilled labours who are well known for their workmanship. The skilled labours take years to train and are difficult recruits. Lim Co.'s labours are only able to work for 12,000 hours in a period. The labours are paid RM18 per hour.

Lim Co. sells cues to a large market, demand for the cues is strong and in any period, up to 15,000 standard cues and 15,000 distinctive cues could be sold. The selling price for standard cues and distinctive cues are RM45 and RM75, respectively.

Manufacturing details for the two products are as follows:

	Standard cues	Distinctive cues
Labours time per cue	0.5 hours	0.75 hours
Ash	250g	250g
Other variable costs per cue	RM1.50	RM4.50
The company does not keep inventory.

Some of the labours have offered to work overtime, provided that they are paid double time for the extra hours over the contracted 12,000 hours. Lim Co. has estimated that up to 1,000 hours per period could be gained in this way.

You are required to write a suggestion report:

Advise Lim whether to accept the labours' initial offer of working overtime. Support your argument with the Linear Programming Graph. Your report should include the following points:

Discussion on the rate of pay requested, the quantity of hours and optimal production.

Some computations; e.g. contribution margin for each cue, maximum contribution earned.

Critically evaluate on the shadow price of the labours and the materials.

Support your arguments with relevant and valid sources from academic journal articles.

Reference no: EM131851790

Questions Cloud

Injuries sustained after freak street sweeper accident : You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident.

Discuss the examples of internal controls : Provide at least two (2) examples of internal controls that could be implemented to reduce theft in the U.S. retail industry.

Develop the logic that produces the report : The Stevens College Testing Center creates a record each time a student takes a placement test. Develop the logic that produces the report.

What is the probability that exactly four people : What is the probability that exactly four people of this group have the same birthday and that all the others have different birth-days

Discussion on the rate of pay requested : Advise Lim whether to accept the labours' initial offer of working overtime. Support your argument with the Linear Programming Graph.

What is the probability that one will arrive : What is the probability that one will arrive between 1:00 PM. and 1:12 RM., and the other between 1:17 PM. and 1:30 RM.?

Expansion project-requires initial fixed asset investment : Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.458 million.

Create a game that displays a three-by-three grid : Create a game that displays a three-by-three grid containing the digits 1 through 9, similar to the first window shown in Figure 8-15.

Crime investigation six innocent suspects : If during a crime investigation six innocent suspects are examined by the operator, what is the probability that at least one of them is detected as guilty?

User Account

All Pages