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Business
Operations Management
Labors Hours Required (Hours/Unit) Hours Department Product 1 Product 2 Available A 1 0.35 100 B 0.3 0.2 36 C 0.2 0.5 50 Profit Contribution/Unit 30 15 Labors Hours Required (Hours/Unit) Department Product 1 Product 2 Hours Available Available Overtime Overtime Cost Profit A 1 0.35 100 10 18 B 0.3 0.2 36 6 22.5 с 0.2 0.5 50 8 12 Contribution/Unit 30 15

Labors Hours Required (Hours/Unit) Hours Department Product 1 Product 2 Available A 1 0.35 100 B 0.3 0.2 36 C 0.2 0.5 50 Profit Contribution/Unit 30 15 Labors Hours Required (Hours/Unit) Department Product 1 Product 2 Hours Available Available Overtime Overtime Cost Profit A 1 0.35 100 10 18 B 0.3 0.2 36 6 22.5 с 0.2 0.5 50 8 12 Contribution/Unit 30 15

Marketing
Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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1) How much would you be willing to pay per hour of overtime in each department?

2) Suppose that 10,6 and 8 hours of overtime may be scheduled in departments A, B and C respectively. The cost per hour of overtime is $18 in department A, $22.50 in department B, and $12 in department C. What are the optimal production quantities using the available overtime? What is the new profit?

3) What is the increase in the total contribution to profit if overtime is used?

Labors Hours Required (Hours/Unit) Hours Department Product 1 Product 2 Available A 1 0.35 100 B 0.3 0.2 36 C 0.2 0.5 50 Profit Contribution/Unit 30 15
Transcribed Image Text:Labors Hours Required (Hours/Unit) Hours Department Product 1 Product 2 Available A 1 0.35 100 B 0.3 0.2 36 C 0.2 0.5 50 Profit Contribution/Unit 30 15
Labors Hours Required (Hours/Unit) Department Product 1 Product 2 Hours Available Available Overtime Overtime Cost Profit A 1 0.35 100 10 18 B 0.3 0.2 36 6 22.5 с 0.2 0.5 50 8 12 Contribution/Unit 30 15
Transcribed Image Text:Labors Hours Required (Hours/Unit) Department Product 1 Product 2 Hours Available Available Overtime Overtime Cost Profit A 1 0.35 100 10 18 B 0.3 0.2 36 6 22.5 с 0.2 0.5 50 8 12 Contribution/Unit 30 15
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