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The Philbrick Company has two plants on opposite sides of the United States. Each of these plants produces the same two prod - ucts and
The Philbrick Company has two plants on opposite sides of
the United States. Each of these plants produces the same two prod
ucts and then sells them to wholesalers within its half of the coun
try. The orders from wholesalers have already been received for the
next months February and March where the number of units
requested are shown below. The company is not obligated to com
pletely fill these orders but will do so if it can without decreasing its
profits.
Plant Plant
Product February March February March
Each plant has production days available in February and
production days available in March to produce and ship these prod
ucts. Inventories are depleted at the end of January, but each plant
has enough inventory capacity to hold units total of the two
products if an excess amount is produced in February for sale in
March. In either plant, the cost of holding inventory in this way is
$ per unit of product and $ per unit of product
Each plant has the same two production processes, each of
which can be used to produce either of the two products. The pro
duction cost per unit produced of each product is shown below for
each process in each plant.
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