Question
A company has 3 plants with excess production capacity. All three have the facility to manufacture a product and the management decided to use a
A company has 3 plants with excess production capacity. All three have the facility to manufacture a product and the management decided to use a part of the production capacity in this regard. This product can be manufactured in three types of sizes: large, medium, and small, giving us a net profit per unit of $12.00, $10.00, and $9.00, respectively. Plants 1, 2, and 3 are overstaffed, as well as overstaffed to produce any size or combination of sizes being manufactured, however, the space capacity that exists in the warehouse places a constraint on production rates. Plants 1, 2 and 3 have 9,000, 8,000 and 3,200 m2 of usable storage area, respectively. Each unit of the large, medium and small sizes requires 20.15 and 12 m2 respectively. Sales forecasts indicate that at least 600, 800, and 500 units of the large, medium, and small sizes must be sold to maintain an even workload.
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