The Crandon Manufacturing Company produces two principal product lines. One is a portable circular saw, and the other is a precision table saw. Two basic operations are crucial to the output of these saws: fabrication and assembly. The maximum fabrication capacity is 4000 hours per month; each circular saw requires 2 hours, and each table saw requires 1 hour. The maximum assembly capacity is 5000 hours per month; each circular saw requires 1 hour, and each table saw requires 2 hours. The marketing department estimates that the maximum market demand next year is 3500 saws per month for both products. The average contribution to profits and overhead is $900 for each circular saw and $600 for each table saw. Management wants to determine the best product mix for the next year so as to maximize contribution to profits and overhead. Also, it is interested in the payoff of expanding capacity or increasing market share.
The Crandon Manufacturing Company produces two principal product lines. One is a portable circular saw, and the other is a precision table saw. Two basic operations are crucial to the output of these saws: fabrication and assembly. The maximum fabrication capacity is 4000 hours per month; each circular saw requires 2 hours, and each table saw requires 1 hour. The maximum assembly capacity is 5000 hours per month; each circular saw requires 1 hour, and each table saw requires 2 hours. The marketing department estimates that the maximum market demand next year is 3500 saws per month for both products. The average contribution to profits and overhead is $900 for each circular saw and $600 for each table saw.
Management wants to determine the best product mix for the next year so as to maximize contribution to profits and overhead. Also, it is interested in the payoff of expanding capacity or increasing market share.
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