Vaughan ltd makes 2 different types of shoe brogue and

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Reference no: EM13374178

Vaughan Ltd makes 2 different types of shoe, Brogue and Casual, each using the same leather and the same skilled labour. The costs of the products per unit of production are as follows:

	Brogue	Casual
	£	£
Selling price	96	80
Materials @ £3 per Kg	24	12
Labour @ £12 per hour	36	36
Other variable costs	12	12
Allocation of fixed costs	12	12

Profit per unit	12	8

The company is drawing up production plans for the month of June 2012. The anticipated maximum demand in the period is for 50 pairs of Brogues and 80 pairs of Casuals.

There are only 640kg of material and 300 hours of labour available in the period.

The company wishes to maximise profit in the period

Required

(a) Formulate a linear programming model for this problem.

(b) Prepare the initial tableau if the problem is to be solved using simplex.

(d) What are the shadow prices of materials and labour?

(e) If extra labour became available at £18 per hour should they be employed? If so how many extra hours should be bought?

(f) By how much would the contribution of Casual shoes have to increase by to change your decision in part (c)?

Reference no: EM13374178

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