What is optimal production quantity-what is optimal profit

Assignment Help Operation Management

Reference no: EM132254958

A manufacturer sells two types of products. Product 1 is sold at a price of $50 per unit and product 2 at a price of $60 per unit. Three units of raw material and 1.5 labor hours are needed to manufacturer one unit of product 1. Six units of raw material and 2 labor hours are need to manufacture one unit of product 2. The unit variable cost for product 1 is $30, and for product 2 is $20. A total of 15,000 units of raw material and 10,000 labor hours are available. If any product 1 is produced, a setup cost of $20,000 is incurred; if any product 2 is produced, a setup cost of $35,000 is incurred. Determine how to maximize the manufacturer’s profit.

What is the effective capacity for product 1 and product 2, respectively?

In the optimal solution, which product(s) will be manufactured? What is the optimal production quantity? What is the optimal profit?

Reference no: EM132254958

Questions Cloud

Creates misalignment with organization core mission : This creates a misalignment with the organization's core mission, values, and strategy.

Conduct a swot analysis by analyzing the strengths : Conduct a SWOT analysis by analyzing the strengths, weaknesses, application opportunities, and threats from competitors of the chosen topic.

Are our hours being reduced to prevent a layoff : List 5 rhetorical strategies or rhetorical fallacies that are heard often within the workplace (does not have to be your workplace).

Perform a k-means analysis : Document the findings and justify the choice of K. Hint: use data(ruspini) to load the dataset into the R workspace.

What is optimal production quantity-what is optimal profit : In the optimal solution, which product(s) will be manufactured? What is the optimal production quantity? What is the optimal profit?

Determine the total manufacturing costs incurred : Cost of Goods Manufactured was $805,000. Use this information to determine the total manufacturing costs incurred during the fiscal year 2018

Describe gap analysis and it''s importance : A. What are some guidelines that software project teams must follow during the initial planning phase?

Calculate the amount to retained earnings : Baltimore Corporation authorized 15% stock dividend when market value was $10 per share. Calculate amount either (debited) or credited to retained earnings

Why would you select one replacement policy over another : Why would you select one replacement policy over another? How does a specific operating system and its application impact your choice?

User Account

All Pages