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company manufactures 3 diff types of pipe fittings: tees, elbows, and splicers. Daily production of these parts is limited by the availability of lathe time, grinder time, and labor availability, as indicated in the table below:

company manufactures 3 diff types of pipe fittings: tees, elbows, and splicers. Daily production of these parts is limited by the availability of lathe time, grinder time, and labor availability, as indicated in the table below:

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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A company manufactures 3 different types of pipe fittings: tees, elbows, and splicers. Daily production of these parts is limited by the availability of lathe time, grinder time, and labor availability, as indicated in the table below: Resources Products 100 Elbows Person hours/day 4 24 Lathe hours/day 2 8 Grinder hours/day 1 12 Profit per 100 units $550 ΝΑ For example, each 100 units of tees requires 6 person hours to produce, including 1 hour of lathe time and 2 hours of grinder time. All the tees that are made can be sold for $700 per 100 units. A total of 24 person hours, 8 lathe hours, and 12 grinder hours are available on a given day. 100 Tees 6 1 2 $700 Availability of Resources 100 Splicers 5 1 0 $480 a. Suppose a local rental equipment company is willing to rent you additional machine time on an hourly basis. How much would you be willing to pay per hour for additional lathe and grinding machine work? b. Suppose the local labor union demands an extension of mandatory rest periods each shift, which would reduce your available work time to 21 person hours per day. How would this affect your production policy and daily profit?
Transcribed Image Text:A company manufactures 3 different types of pipe fittings: tees, elbows, and splicers. Daily production of these parts is limited by the availability of lathe time, grinder time, and labor availability, as indicated in the table below: Resources Products 100 Elbows Person hours/day 4 24 Lathe hours/day 2 8 Grinder hours/day 1 12 Profit per 100 units $550 ΝΑ For example, each 100 units of tees requires 6 person hours to produce, including 1 hour of lathe time and 2 hours of grinder time. All the tees that are made can be sold for $700 per 100 units. A total of 24 person hours, 8 lathe hours, and 12 grinder hours are available on a given day. 100 Tees 6 1 2 $700 Availability of Resources 100 Splicers 5 1 0 $480 a. Suppose a local rental equipment company is willing to rent you additional machine time on an hourly basis. How much would you be willing to pay per hour for additional lathe and grinding machine work? b. Suppose the local labor union demands an extension of mandatory rest periods each shift, which would reduce your available work time to 21 person hours per day. How would this affect your production policy and daily profit?
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