Fisher Company produces two types of components for airplanes: A and B, with unit contribution margins of $200 and $400, respectively. The components pass through three sequential processes: cutting, welding, and assembly. Data pertaining to these processes and market demand are given on the following page (weekly data).

Required:
1. Express Fisher Company’s constrained optimization problem as a linear programming model.
2. Using a graphical approach, solve the linear programming model expressed in Requirement 1. Which constraints are binding?
3. What if Fisher Company had five additional machine hours (cutting) with all other resources held constant? What is the new optimal mix and associated total contribution margin? What is the incremental benefit per machine hour caused by the additional five hours, if any?LO1

Transcribed Image Text:

Resource Cutting Welding Assembly Market demand (A) Market demand (B) Resource Available 150 machine hours 154 welding hours 200 labor hours 50 40 Resource Usage (A) Three hours Five hours Two hours Resource Usage (B) Five hours Three hours Five hours Zero units One unit Zero units One unit