Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jack's Small Enterprises runs two factories in Ohio: one in Toledo and one in Centerville. Its factories produce a variety of products. Two of its

Jack's Small Enterprises runs two factories in Ohio: one in Toledo and one in Centerville. Its factories produce a variety of products. Two of its product lines are polished wood clocks, which are adorned with a regional theme. Naturally, clocks popular in the southwest are not as popular in the northeast, and vice versa. Each plant makes both clocks. These clocks are shipped to St Louis for distribution to the southeast and western states and to Pittsburgh for distribution to the south and northeast states. The company is considering streamlining its plants by removing certain production lines from certain plants. The company could potentially eliminate the clock production line at either the Toledo or the Centerville plant. Each plant carries a fixed operating cost for setting up the line and a unit production cost, both in terms of money and factory worker hours. The following table summarizes this information:

Production Cost Clocks Produced
per Clock per Hour Available
Plant Fixed Cost for Southwest Northeast Southwest Northwest Hours per
Line Clock Clock Clock Clock Month
Toledo $20,000 $10 $12 5 6 500
Centerville $24,000 $9 $13 5.5 6.2 675

The southwest clocks are sold for $23 each, and the northeast clocks are sold for $25 each. Demand rates used for production planning are 1,875 southwest clocks for sale out of the St Louis distribution center and 2,000 northeast clocks for sale out of the Pittsburgh distribution center. Assume all these units are sold. The per-clock transportation costs from plant to distribution center are given in the following table:

Cost to Ship to Distribution Center

Plant

St Louis

Pittsburgh

Toledo

$2

$4

Centerville

3

2

Using a network flow model for this problem and implement this model in Solver. Use the model to answer the following questions:

a. Should any of the production lines be shut down?
b. How should worker hours be allocated to produce the clocks to meet the demand forecasts? Are there any excess hours? If so, how many?
c. What is the expected monthly profit?
d. If a plant is closed, what are the estimated monthly savings?

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

Step: 3

blur-text-image

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

Concepts In Vector Analysis

Authors: Rashmi Rana

1st Edition

9353146410, 9789353146412

More Books

Students also viewed these Mathematics questions

Question

What is the difference between gage pressure and absolute pressure?

Answered: 1 week ago

Question

Brief the importance of span of control and its concepts.

Answered: 1 week ago

Question

What is meant by decentralisation?

Answered: 1 week ago

Question

Write down the Limitation of Beer - Lamberts law?

Answered: 1 week ago

Question

Discuss the Hawthorne experiments in detail

Answered: 1 week ago

Question

Identify two potential substitutes for corporate diversification.

Answered: 1 week ago