Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Crafting S.L. would like to identify other products that could be in- troduced in their production and that could be profitable. However, among those products,

image text in transcribed

Crafting S.L. would like to identify other products that could be in- troduced in their production and that could be profitable. However, among those products, it is better to consider those that use one of the available resources (cloth, yarn, crafting materials and labor) as spar- ingly as possible because of its cost. Identify this resource and explain your choice.

The company Crafting S.L located in California produces cloth, yarn, and crafting materials. So far they have only sold their products in the state but now they have decided to start selling their goods to other states. Since sales in California have not been very good lately, the goal of the company is maximizing their weekly profit from sales to other states and not sell in California anymore. The profit is computed as the difference between the revenue from sales and the cost of materials. The marketing office has done some research and got to the conclusion that they could sell all that they produce at $30 per meter of cloth, $9 per skein of yarn, and $25 per pound of crafting materials. In order to produce one meter of cloth, it is necessary to use 1 skein of yarn, 0.1 pounds of crafting materials and 200 yards of sewing thread (the company buys thread at $0.5 per 100 yards). Other necessary materials and expenses, such as machinery, cost about $4 per meter of cloth. In addition, it takes 30min. of labor to produce 1 meter of cloth. The company can produce a maximum of 5,500 meters of cloth per week. In order to produce 1 skein of yarn, the company uses 100 yards of sewing thread, 0.05 pounds of crafting materials, as well as, 5min. of labor. Additionally, the cost of the necessary machinery is about $2.5 per skein of yarn. The company can produce a maximum of 3,000 skeins of yarn per week. To produce one pound of crafting materials, the company uses 50min. of labor and the cost of the machinery used is $1.5 per pound. Additionally, they use 0.75 skeins of yarn and 0.12 meters of cloth. The maximum amount. of crafting materials that the company can produce is 500 pounds per week. The company has a maximum of 2000 hrs of labor available each week. And since it does not have a warehouse, everything that is produced needs to be sold or used to produce other goods. The company has credit to buy thread and simple crafting materials to produce cloth and yarn at a reduced price of $10 per pound at zero interest. But the company cannot buy more than 1000 pounds of simple crafting materials per week. The CEO of the company has hired you to lead their research team. The following are the tasks that you will have to accomplish with the help of your team

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Project Management A Managerial Approach

Authors: Jack R. Meredith, Samuel J. Mantel,

7th Edition

470226218, 978-0470226216

More Books

Students also viewed these General Management questions