Question Completion Status: Question 1 Save Answer The California Airplane Company builds small jet air-planes to sell to corporations for use by their executives. The company's 5 points customers sometimes order a custom design of the airplanes being purchased. When this occurs, a substantial start-up cost is incurred to initiate the production of these airplanes. The company has recently received purchase requests from four customers with short deadlines. However, because the company's production facilities already are almost completely tied up filling previous orders, it will not be able to accept all four orders. Therefore, a decision needs to be made on the number of airplanes the company will agree to produce (if any) for each of the four customers. The table below provides the relevant data. The first row gives the start-up cost required to initiate the production of the airplanes for each customer. Once production is under way, the marginal net revenue (which is the purchase price minus the marginal production cost) from each airplane produced is shown in the second row. The third row gives the percentage of the available production capacity that would be used for each airplane produced. The last row indicates the maximum number of airplanes requested by each customer (but less will be accepted). How many airplanes to produce for each customer (if any) to maximize the company's total profit. Formulate and solve a spreadsheet model with binary variables for this problem. Customers 2 4 Start-up cost 0 $3 million 0 Marginal net $2.5 million $2 million $0.8 milion revenue Capacity used 15% 20% 30% 15% per plane Maximum order 3 planes 3 planes 2 planes 5 planes 1 3 $2 million $3 million 150 Arial 3 (1200 T.EE 10 15 ENG TH 05 - Merria. hp Question Completion Status: Question 1 Save Answer The California Airplane Company builds small jet air-planes to sell to corporations for use by their executives. The company's 5 points customers sometimes order a custom design of the airplanes being purchased. When this occurs, a substantial start-up cost is incurred to initiate the production of these airplanes. The company has recently received purchase requests from four customers with short deadlines. However, because the company's production facilities already are almost completely tied up filling previous orders, it will not be able to accept all four orders. Therefore, a decision needs to be made on the number of airplanes the company will agree to produce (if any) for each of the four customers. The table below provides the relevant data. The first row gives the start-up cost required to initiate the production of the airplanes for each customer. Once production is under way, the marginal net revenue (which is the purchase price minus the marginal production cost) from each airplane produced is shown in the second row. The third row gives the percentage of the available production capacity that would be used for each airplane produced. The last row indicates the maximum number of airplanes requested by each customer (but less will be accepted). How many airplanes to produce for each customer (if any) to maximize the company's total profit. Formulate and solve a spreadsheet model with binary variables for this problem. Customers 2 4 Start-up cost 0 $3 million 0 Marginal net $2.5 million $2 million $0.8 milion revenue Capacity used 15% 20% 30% 15% per plane Maximum order 3 planes 3 planes 2 planes 5 planes 1 3 $2 million $3 million 150 Arial 3 (1200 T.EE 10 15 ENG TH 05 - Merria. hp
