Question
The M-N plant manufactures two different products: M and N. Selling prices and weekly market demands are shown in the following diagram. Each product
The M-N plant manufactures two different products: M and N. Selling prices and weekly market demands are shown in the following diagram. Each product uses raw materials with costs as shown. The plant has three different machines: A, B, and C. Each performs different tasks and can work on only one unit of material at a time. Resources: A, B, C (one each) Availability: 4,000 min./week Operating expense: $12,000/week Product M $190/unit 110 units/week Product N $200/unit 50 units/week 15 min./unit 15 min./unit A B B 20 min./unit 15 min./unit 15 min./unit RM-1 $60/unit RM-2 $40/unit /RM-3 $40/unit Process times for each task are shown in the diagram. Each machine is available 4,000 minutes per week. There are no "Murphys" (major opportunities for the system to foul up). Setup and transfer times are zero. Demand is constant. Operating expenses (including labor) total a constant $12,000 per week. Raw materials are not included in weekly operating expenses. b. Which product mix provides the highest gross profit? (Hint: consider raw material cost but not operating expense) Answer is complete but not entirely correct. Product mix Product M Product N 160 50 units units c. What is the maximum weekly net profit this plant can earn using the product mix from Part b? (Hint: consider operating expense and raw material cost) Answer is complete but not entirely correct. Weekly net profit = $ 3,400
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