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Question A24 BespOak Ltd produce three handmade oak products, a dining table, a wardrobe, and a bench. Oak is the principal raw material used but
Question A24 BespOak Ltd produce three handmade oak products, a dining table, a wardrobe, and a bench. Oak is the principal raw material used but their also some additional fittings such as screws, bolts and handles. Due to an outbreak of a fungus in Eastern Europe, the Oak required in production is limited to just 2,250m2 for the next six months. BespOak must decide how to schedule production in order to maximise profitability. The company has an existing order from Lewis John department stores for 100 dining tables. Maximum demand for the various products in the next six months is as follows: 350 dining tables 200 wardrobes 400 benches . Information per unit: Selling price Labour cost at 15 per hour Oak at 25 per m2 Additional fittings Fixed costs Profit Table 500 85 150 25 30 210 Wardrobe 755 135 125 45 35 415 Bench 300 45 50 10 15 180 Using the information provided what quantity of wardrobes should BespOak produce in next 6 months? (assuming production is scheduled to maximise profitability whilst honouring existing contracts)
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