Question
Alta Electronics manufactures six peripheral devices (indicated in the table) for PCs at its Calgary plant. Each of these products requires time, in minutes to
Alta Electronics manufactures six peripheral devices (indicated in the table) for PCs at its Calgary plant. Each of these products requires time, in minutes to be processed in three departments (covering assembly, testing, etc.,), as shown in the table.
The first two departments are available 120 hours per week, while the third is available for only 100 hours each week. Since the demand for all six peripheral devices is very large, Alta believes it can sell as many units of each product it can manufacture.
Device | DVD-R | DVD-D | Flash Drive | HD-30 | HD-60 | 2GB-Memory |
Revenue ($) per unit | 200 | 240 | 80 | 180 | 230 | 90 |
Material Cost ($) per unit | 35 | 45 | 7 | 45 | 48 | 6 |
Department # 1 (in hours) | 0.167 | 0.200 | 0.067 | 0.167 | 0.200 | 0.083 |
Department # 2 (in hours) | 0.100 | 0.100 | 0.083 | 0.117 | 0.150 | 0.067 |
Department # 3 (in hours) | 0.050 | 0.050 | 0.067 | 0.067 | 0.083 | 0.033 |
In addition, variable labor costs are $15 per hour for department 1, $12 per hour for department 2, and $18 per hour for department 3. Alto also has the following production requirements based on existing standing weekly orders:
- At least 43 hard drives (i.e., HD-30 and HD-60) must be produced each week.
- At least 20 units of each of the six products must be produced each week.
- Develop an Excel model of the problem, ensuring that each variable and constraint is clearly indicated. (
- What should Alta electronics manufacture if it intends to maximize profit? Write your recommendation directly in the appropriate worksheet.
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