Reference no: EM132515976

The Printing department's most common request is for three types of print material, large books, small books and magazine style (many photos and or diagrams but small number of pages). Each are prepared sequentially thorough four sub-departments, layout, print, bind and packaging. Management is planning its production schedule for next month. As some machines will be out of service for overhauling the availability of machine times is reduced to those shown below.

Available machine hours

Sub-department

Layout 7,000

Print 6,200

Bind 5,400

Package 6,600

Machine hours required per unit for each product is each department are as follows:

Sub-department

Product                   Layout                 Print             Bind                    Package

Large book                3                        4                2                   1

Small book                  2                       2                   2                1

Magazine style            4                          1                1                1

Machine hours required per unit of product

Sales forecasts of product demand next month are:

Product Sales

Large book 500

Small book 600

Magazine style 2,000

Selling prices and raw materials costs of each product are:

Product                      Large book               Small book                 Magazine style

Selling price                $180                      $120                       $14

Direct materials cost              $70               $40                         $8

Required:

Question a) Determine whether the Printing division can meet the sale demand next month.What department is a constraint, if any?

Question b) What is the most profitable production schedule for the Printing division?

Question c) What strategies would you suggest to minimise the impact of the machine down-time?