Question
Mr Fashion has just returned from a trip to the Far East where he secured 20 000 metres of special soft denim material on a
Mr Fashion has just returned from a trip to the Far East where he secured 20 000 metres of special soft denim material on a once- off deal. He is confident that he can land this material here in South Africa at R15 per metre. Mr Fashion is in the business of manufacturing blouses, trousers and jackets. According to research undertaken by his marketing department the potential market for blouses is in the order of 12 000 (at a selling price of R70) and for trousers 6 000 (at a selling price of R95.) The jackets are top of the range garments and will retail for R150 but at this price the demand is estimated at 3 000 units. According to the production schedules a blouse will use 0.75 per metres of material, a pair of trousers 1.25 metres of fabric and the jackets will require 1.5 metres of material. (N B: It is a known fact that in the manufacturing process some 10% of the original material will be lost in the making up process.) The standards for labour and machine hours are set down as follows:
Blouses Trousers Jackets Machine Hrs 18 minutes 30 minutes 45 minutes Labour Hrs 30 minutes 45 minutes 60 minutes Machine hours are costed out at R18 an hour with total available of 10 000 hours Labour hours are costed out at R12 an hour and because of over-supply of labour in the industry any amount of labour can be hired at the going rate. REQURED: If material is in short supply, please advise Mr Fashion on the production plan that will maximise contribution and clearly indicate the maximum contribution that can be achieved from the above plan. (25 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started