Macro's Systems manufactures point of sale (POS) computer systems...

Macro's Systems manufactures point of sale (POS) computer systems for the hospitality industry. At the present time, the company makes three POS systems with the following characteristics:

POS 1 POS 2 POS 3

Unit selling price $15,000 $12,000 $10,000

Unit variable cost $10,000 $9,000 $6,000

The manufacture of the POS systems requires three major resources during their assembly. There is limited capacity for each resource. The following table shows the amount of each resource consumed by each POS system and the capacity available of that resource.

POS 1 POS 2 POS 3 Capacity

Resource A 4 6 5 20,000

Resource B 6 4 3 25,000

Resource C 7 5 4 30,000

Additional resources are available, but need to be purchased in 1,000 unit increments.

Required:

1. Assume that demand for each product exceeds the capacity available. Choose a production plan that maximizes contribution and provide the maximized contribution resulting from this plan.

2. Assume that, for marketing purposes, Macro's needs to manufacture at least 200 units of each product. Choose a production plan that maximizes contribution and provide the maximized contribution resulting from this plan.

3. Refer to the situation as describe in part 2.

a. By how much would the contribution increase if an additional unit of Resource A became available?

b. By how much would the contribution increase if an additional unit of Resource B became available?

c. By how much would the contribution increase if an additional unit of Resource C became available?

4. Refer to the situation as described in part 2. You can purchase extra units of Resources A, B and C as follows:

Amount Available Cost per 1,000 units

Resource A 5,000 $50,000

Resource B 3,000 $200,000

Resource C 2,000 $400,000

How much of each resource should Macro's acquire? By doing so, what is the incremental contribution that can be obtained? What quantity of each POS system will now be made?