Question
The Butterfield Company makes a variety of hunting knives. Each knife is processed on four machines. Following are the processing times required: machine capacities (in
The Butterfield Company makes a variety of hunting knives. Each knife is processed on four machines. Following are the processing times required: machine capacities (in hours) are 1500 for machine 1, 1400 for machine 2, 1600 for machine 3, and 1500 for machine 4. Processing Times (hr) Knife Machine 1 Machine 2 Machine 3 Machine 4 A 0.05 0.10 0.15 0.05 B 0.15 0.10 0.05 0.05 C 0.20 0.05 0.10 0.20 D 0.15 0.10 0.10 0.10 E 0.05 0.10 0.10 0.05 Each product contains a different amount of raw materials. Raw material 1 costs $0.50 per ounce and raw material 2 costs $1.50 per ounce. There are 75,000 ounces of raw material 1 and 100,000 ounces of raw material 2 available. Requirements (oz/unit) Knife Raw Material 1 Raw Material 2 Selling Price ($/unit) A 4 2 15.00 B 6 8 25.50 C 1 3 14.00 D 2 5 19.50 E 6 10 27.00 The objective is to maximize profits. Formulate the LP and solve it on a spreadsheet. Also, answer these questions using the output information from the solved linear program. (a) If you as a manager can add 20 hours of machine capacity for machine 2 at a cost of $40 per hour, should you do it? If yes, how much additional net profit per item would be gained after the $40 per hour expense? If no, why do you answer no? (b) If you as a manager can add 20 hours of machine capacity for machine 3 at a cost of $20 per hour, should you do it? If yes, how much additional net profit per item would be gained after the $20 per hour expense. If no, why do you answer no? Hint: There are 4 machine constraints and 2 material constraints and Profit = Rev Cost
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