Nirvana, Inc. makes three types of doll furniture from high-quality recycled lumber (from demolished barns, houses, and other buildings). They sell directly to retailers who in turn sell to the final customer. Demand for their products has been increasing in recent months.

Each piece of furniture made must be processed through two departments

(1) cutting and

(2) finishing before it is sold.

The sales prices and costs of inputs can be found in the table below. In addition to the information below, Creative Constructs has only been able to obtain 500 board feet of high-quality, recycled lumber per week. In addition, the labor used in both the cutting and assembly departments is highly-skilled and difficult to hire and train, which limits the hours available. Currently, there is a maximum of 180 labor hours available per week in cutting and 240 labor hours available in finishing. No overtime is authorized by the owners of the company to make sure all employees are well rested and less stressed so they can produce quality products.

OBJECTIVE: Determine which mix of products maximizes weekly profits (short-term solution) and discuss options to alleviate the constraints in the long-term.

Input the following data into an Excel Spreadsheet:

	CHAIRS	BEDS	SOFAS
Selling price	$25.00	$29.00	$37.00
DM per unit (lumber)	6.00	7.00	9.00
Conversion cost per unit	11.32	12.40	14.96
Contribution Margin	7.68	9.60	13.04
DM per unit in board feet	1.5	2	3
Labor hrs Cutting	0.5	0.6	0.8
Labor hrs Assembly & Finishing	1.2	1.3	1.6
DEMAND	No more than 150 per week	No more than 100 per week	No more than 75 per week

Using Excel Solver find the optimal product mix Creative Constructs should produce in the coming period.

Identify which constraint is the biggest problem and address the question of what options Nirvana might consider alleviating the constraints in the long-term.