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its in hours 2. A manufacturer of vacuum cleaners produces three models of canister-style vacuum cleaners-the X-100, X-200, and X-300-on a production line with three
its in hours 2. A manufacturer of vacuum cleaners produces three models of canister-style vacuum cleaners-the X-100, X-200, and X-300-on a production line with three stations-motor assembly, final assembly, and test. The line is highly automated and is run by three operators, one for each station. Data on production times, material cost, sales price, and bounds on demand are given in the following tables: Product Material Cost ($/Unit) Price $/Unit) Minimum Demand Maximum Demand (Units per Month) (Units per Month) 80 350 750 X-100 X-200 X-300 500 150 160 1,500 500 300 620 Product Motor Assembly (Minimum per Unit) Final Assembly (Minimum per Unit) Test (Minimum per Unit) X-100 X-200 X-300 12 Labor costs $20 per hour (including benefits), and overhead for the line is $460,000 per month. The current production plan calls for production of X-100, X-200, and X-300 to be 625, 500, and 300 units per month, respectively. (a) What is the monthly profit that results from the current production plan i.e., sales revenue minus labor cost minus material cost minus overhead)? (b) Estimate the profit per unit of each model, using direct labor hours to allocate the overhead cost per month. Which product appears most profitable? Is the current production plan consistent with these estimates? If not, propose an alternative production plan and compute its monthly profit
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