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Operations Management
8.10. The B. J. Jensen Company specializes in the production of power saws and power drills for home use. Sales are relatively stable throughout the year except for a jump upward during the Christmas season. Since the production work requires considerable work and experience, the company maintains a stable employment level and then uses overtime to increase production in November. The workers also welcome this opportunity to earn extra money for the holidays. B. J. Jensen, Jr. the current president of the company, is overseeing the production plans being made for the upcoming November. He has obtained the data shown in the table below. However, Mr. Jensen now has learned that, in addition to the limited number of labor hours available, two other factors will limit the production levels that can be achieved this November. One is that the company's vendor for power supply units will only be able to provide 10.000 of these units for November (2.000 more than his usual monthly shipment). Each power saw and each power drill requires one of these units. Second, the vendor who supplies a key part for the gear assemblies will only be able to provide 15,000 for November (4,000 more than for other months). Each power saw requires two of these parts and each power drill requires one. Maximum Monthly Production Profit per Unit Produced Regular Time Overtime Regular Time Overtime Power saws 3,000 2,000 $150 $50 Power drills 5,000 3,000 100 75 *Aasuming adequate supplies of meteriels from the company's vendors Mr. Jensen now wants to determine how many power saws and how many power drills to produce in November to maximize the company's total profit. Page 327

8.10. The B. J. Jensen Company specializes in the production of power saws and power drills for home use. Sales are relatively stable throughout the year except for a jump upward during the Christmas season. Since the production work requires considerable work and experience, the company maintains a stable employment level and then uses overtime to increase production in November. The workers also welcome this opportunity to earn extra money for the holidays. B. J. Jensen, Jr. the current president of the company, is overseeing the production plans being made for the upcoming November. He has obtained the data shown in the table below. However, Mr. Jensen now has learned that, in addition to the limited number of labor hours available, two other factors will limit the production levels that can be achieved this November. One is that the company's vendor for power supply units will only be able to provide 10.000 of these units for November (2.000 more than his usual monthly shipment). Each power saw and each power drill requires one of these units. Second, the vendor who supplies a key part for the gear assemblies will only be able to provide 15,000 for November (4,000 more than for other months). Each power saw requires two of these parts and each power drill requires one. Maximum Monthly Production Profit per Unit Produced Regular Time Overtime Regular Time Overtime Power saws 3,000 2,000 $150 $50 Power drills 5,000 3,000 100 75 *Aasuming adequate supplies of meteriels from the company's vendors Mr. Jensen now wants to determine how many power saws and how many power drills to produce in November to maximize the company's total profit. Page 327

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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**8.10. B. J. Jensen Company Production Planning and Profit Analysis** The B. J. Jensen Company specializes in producing power saws and power drills for home use. The company experiences relatively stable sales throughout the year with a noticeable surge during the Christmas season. Due to the labor-intensive nature of production, and to ensure a consistent workforce, the company opts for overtime work to meet demand increases in November, providing employees with an opportunity to earn extra income for the holidays. **Current Planning Overview:** B. J. Jensen, Jr., the current president, is in charge of planning for the upcoming November production. The challenge involves limited labor hours and additional constraints from suppliers. Specifically: - **Limited Vendor Supply:** The company can obtain only 10,000 power supply units in November (2,000 more than usual). Each product requires one unit. - **Key Component for Assembly:** The vendor supplying a crucial part for gear assemblies can provide only 15,000 parts (4,000 more than other months). Each power saw requires two parts; each power drill requires one. **Production and Profit Table:** | | Maximum Monthly Production* | Profit per Unit Produced | |---------------------------|-----------------------------|---------------------------| | | Regular Time | Overtime | Regular Time | Overtime | | **Power Saws** | 3,000 | 2,000 | $150 | $50 | | **Power Drills** | 5,000 | 3,000 | $100 | $75 | - *Assumes materials from vendors are sufficient. **Objective:** Mr. Jensen aims to establish the optimal number of power saws and drills to produce to maximize company profit in November. **Tasks:** a. **Draw Profit Graphs:** Create profit graphs for both power saws and power drills to visualize potential profits based on production levels. **Page 327**
Transcribed Image Text:**8.10. B. J. Jensen Company Production Planning and Profit Analysis** The B. J. Jensen Company specializes in producing power saws and power drills for home use. The company experiences relatively stable sales throughout the year with a noticeable surge during the Christmas season. Due to the labor-intensive nature of production, and to ensure a consistent workforce, the company opts for overtime work to meet demand increases in November, providing employees with an opportunity to earn extra income for the holidays. **Current Planning Overview:** B. J. Jensen, Jr., the current president, is in charge of planning for the upcoming November production. The challenge involves limited labor hours and additional constraints from suppliers. Specifically: - **Limited Vendor Supply:** The company can obtain only 10,000 power supply units in November (2,000 more than usual). Each product requires one unit. - **Key Component for Assembly:** The vendor supplying a crucial part for gear assemblies can provide only 15,000 parts (4,000 more than other months). Each power saw requires two parts; each power drill requires one. **Production and Profit Table:** | | Maximum Monthly Production* | Profit per Unit Produced | |---------------------------|-----------------------------|---------------------------| | | Regular Time | Overtime | Regular Time | Overtime | | **Power Saws** | 3,000 | 2,000 | $150 | $50 | | **Power Drills** | 5,000 | 3,000 | $100 | $75 | - *Assumes materials from vendors are sufficient. **Objective:** Mr. Jensen aims to establish the optimal number of power saws and drills to produce to maximize company profit in November. **Tasks:** a. **Draw Profit Graphs:** Create profit graphs for both power saws and power drills to visualize potential profits based on production levels. **Page 327**
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