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White Berhad produces four different products. Estimates of sales, production and cost for the coming year are as follows: A B C Maximum demand (units)
White Berhad produces four different products. Estimates of sales, production and cost for the coming year are as follows: A B C Maximum demand (units) 1,000 2,000 500 1,000 Per unit Selling price (RM) 60 60 50 100 80 Direct labour (RM 4/hour) 16 20 28 24 Direct materials (RM 5/kilo) 25 15 30 25 Contribution (RM) 19 15 42 31 The production manager is expecting either one of the following situation to arise: i. ii. Restriction of foreign labour by the government into local market resulting in labour hour constraint of 15000 hours. Shortage of raw material supply in the local market resulting in only 12,000 kilos of raw material been made available for production. Required: i. ii. Assuming situation 1 arises, whereby the company faces a shortage of labour prepare the following: a. Sequence in which the products should be produced in order to maximize profits. b. The number of products of each type to be produced and amount of profit that would be lost due to the constraint. Assuming situation 2 arises, whereby the company faces a shortage of raw materials prepare the following: a. Sequence in which the products should be produced in order to maximize profits. b. The number of products of each type to be produced and amount of profit that would be lost due to the constraint
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