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Zek Ltd assembles heavy industrial switchboxes. Hitherto, Zek Ltd has assembled only onetype, but recently a decision was made to expand the product range into
Zek Ltd assembles heavy industrial switchboxes. Hitherto, Zek Ltd has assembled only onetype, but recently a decision was made to expand the product range into two types. Thefollowing data pertains to each switchbox:Existing product ZR New product ZRSelling price per unit Variable costs per unit: Direct materials Direct labour Manufacturing overhead Specific fixed costs per day Zek Ltds total general fixed costs per day amount to RThe organisation operates its factory hours per day and this equates to one operatingcycle. Each switchbox goes through two processes, namely assembly and testing. Thenumber of units which can be assembled or tested in one operating cycle is as follows:Assemble TestZZZek Ltd is limited to assembly hours and testing hours in one operating cycle.Management is anxious to ascertain the following, but are unsure as to how to determinethese factors: The most profitable daily that is in one operating cycle production combination The minimum number of units which should be produced in one operating cycle ifZek Ltd wishes to achieve a total daily profit of RRequired Explain why linear programming is appropriate in determining the optimal productionsolution for Zek Ltd Outline the steps to be undertaken when using the graphic linear programmingmethod. Determine, using graphic linear programming, the production combination for Zek Ltdwhich maximises daily profit. Draw the graph in your answer book. Ensure that youlabel the graph comprehensively and clearly.
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