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5. The Canine Kernels Company (CKC) manufactures two different types of dog Chew Toys: A and B. The plant has three different machines: W, X,
5. The Canine Kernels Company (CKC) manufactures two different types of dog Chew Toys: A and B. The plant has three different machines: W, X, and Y. Each performs different tasks and can work on only one unit of material at a time. There is no penalty for not meeting the demand for any type of Chew Toys. Details for each product are shown in the table below: Chew Toys Demand Per Week Selling Price Machine Operation Required Operation Times in Minutes Raw Materials Needed Raw Materials costs A B 300 units 150 units $75 $80 W, X, Y X, X, Y 12, 15, 10 15, 15, 10 RM-1, RM-2 RM-2, RM-3 RM-1 = $20/unit, RM-2 or RM-3 $10/unit Each Chew Toy uses raw materials with costs as shown in the above table where the processing times and the machine required for each operation are also shown. Each machine is available 4,800 minutes per week. There are no system foulups. Demand is deterministic (i. e., no uncertainty). Operating expenses, including labor (but excluding raw materials) total $10,000 per week. a. Assuming market is not a constraint, which machine (resource) is the constraint in this plant? Why? (5 points) b. With the machine (resource) identified as constraint in (a) above, what product mix provides the highest profit? How much is this maximum profit? (5 points) c. In order to exploit the constraint identified in (b) above, is market demand a con- straint for maximizing profits? Why or why not? (3 points) d. Assuming market demand is a constraint, how much additional profit can be made by relaxing this constraint? Please justify your answer. (4 points)
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