Question
Production management at MRP Manufacturing Company is analyzing the appropriateness of using both machine hours and direct labor hours in producing four products. Here, the
Production management at MRP Manufacturing Company is analyzing the appropriateness of using both machine hours and direct labor hours in producing four products. Here, the production managements goal is to use more machine hours and use less labor hours in order to reduce the high cost of labor component. The following multiple regression equation was developed:
Y = a + bx1+ cx2
Where Y is the total hours (dependent variable), a is the fixed hours of setup with a value of 20, b is the slope of machine hours with a value of 3, and c is the slope of direct labor hours with a value of 4. The independentvariables are number of machine hours (x1) and number of direct labor hours (x2). A production analyst has compiled the following operational data for four products.
Items Product 1 Product 2 Product 3 Product 4
Machine hours (x1) 100 50 125 75
Direct labor hours (x2) 1,050 500 800 900
Which of the following products requires the lowest number of total hours to produce? Product 1,Product 2, Product 3 or Product 4?
**The answer is Product 2 at 4,520 hours but I am not getting that number
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