Question
The owner-manager of JR Enterprises (JRE) is deciding on the best allocation of her managerial and technical employees for two types of consulting projects. Both
The owner-manager of JR Enterprises (JRE) is deciding on the best allocation of her managerial and technical employees for two types of consulting projects. Both projects involve providing initial guidance to clients about how to select consultants to undertake the projects. Operation-costing (OC) guidance projects require two manager hours and two technician hours and generate revenue of $600. Incentive-design (ID) guidance projects require one manager hour and four technician hours and generate revenue of $500.
All employees are paid hourly, and the rates charged to clients per hour for managers and technicians are $100 and $50, respectively. JRE has 40 manager hours and 100 technician hours available each week. Company overhead, which is fixed, is charged to projects at the rate of $25 per labour hour. The following is the financial summary for the two types of projects: OC jobs ID jobs Revenue $600 $500 Labour costs
Manager (2 hours @ $100) 200 Manager (1 hour @ $100) 100 Technician (2 hours @ $50) 100 Technician (4 hours @ $50) 200 Overhead allocation 4 hours @ $25 100 5 hours @ $25 125 Profit per job $200 $ 75 Required: Describe the components of a linear program for JRE, including the objective function, decision variables, and constraints.
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