Question
Your company manufactures two types of parkas designed for extreme cold weather, the Mount Everest Parka and the Kilimanjaro Parka. Your company has 120 hours
Your company manufactures two types of parkas designed for extreme cold weather, the Mount Everest Parka and the Kilimanjaro Parka. Your company has 120 hours of cutting time and 120 hours of stitching time available for producing these parkas. Each Mount Everest Parka requires 30 minutes of cutting time and 45 minutes of sewing time, and each Kilimanjaro Parka requires 20 minutes of cutting time and 15 minutes of sewing time. The labour and material cost is Rs.1500 for each Mount Everest Parka and Rs.500 for each Kilimanjaro Parka, and the retail prices through your firms mail order catalogue are Rs.2500 for the Mount Everest Parka and Rs.2000 for the Kilimanjaro Parka. Because management believes that the Mount Everest Parka is a unique coat that will enhance the image of the firm, management specified that at least 20% of the total production must consist of this model. Assume that you can sell as many coats of each type as you can produce, and your production is to maximize total profits from the sales of these parkas, and you may allow the product mix to contain fractional numbers of each parka. a. What is your maximum total profits from sales of the parkas? b. What is the maximum amount that you will pay for an additional hour of cutting time? c. How many hours of cutting time will you procure at that cost? d. What is the minimum selling price below which your optimal product mix changes?
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