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Question 3 Global Tyres Limited manufactures three types of tyres; Premium, Standard and Budget brands. The maximum market demand and resource requirements of each
Question 3 Global Tyres Limited manufactures three types of tyres; Premium, Standard and Budget brands. The maximum market demand and resource requirements of each of these products are shown below: The tyres are made from an advanced slip-resistant material that gives the firm a competitive advantage. Global Tyres has established an export requirement in country B that will result in massive growth. However, an email from the purchasing manager has informed you that the supplier expects that the year's supply of this special material is limited to 251,000 mitres. Global Tyres Limited does not keep any inventory. Without the board of directors' sanction, the sales director has already accepted an order for 1,000 Standard Tyres that, if not fulfilled, would incur a financial penalty of 30,000. This order is included in the Standard Tyres' maximum market demand figure. Global Tyres Limited's directors need to know whether they should first satisfy the contract and then prioritise production in the normal way or whether it should consider breaching the contract and incurring the penalty. Budgeted data for the 2022 year Premium Standard Budget Maximum demand 2,000 1,500 1,000 Heat resistant material per unit 90 70 10
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