Question
company manufacturers and sells three products A,B & C. The unit cost and revenue structure for each product and its maximum forecast demand for the
company manufacturers and sells three products A,B & C. The unit cost and revenue structure for each product and its maximum forecast demand for the coming period are as follows:-
Product | A | B | C |
Selling price per unit (Shs.) | 140 | 100 | 120 |
Variable cost per unit (Shs.) | 70 | 60 | 80 |
Maximum demand (units) | 500 | 300 | 300 |
Machine hours required per unit | 10 | 4 | 5 |
The company has a maximum of 6000 machine hours available during the coming period
Required
Calculate the number of units of each product A, B, and C which should be produced and sold in order to maximize profit
Calculate the maximum profit earned from the decision strategy per 1
Suggest other factors which management may wish to consider which could result in a change in their decision
Calculate the product units to be produced and sold and the net profit earned if the company wish to maximize sales of product A because it is thought to be a future market leader
Calculate the product units to be sold and the net profit earned it the company agree to produce a minimum of 70% of the maximum demand of each product in order to maintain market spread.
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