The Holt Million Corporation’s plant manufactures two different products: X and Y. The plant has three different machines: A, B, and C. Each performs different tasks and can work on only one unit of material at a time. Details for each product are shown in the table below: Product X Y Demand Per Week 200 units 100 units Selling Price $150 $160 Machine Operation Required A, B, C B, B, C Operation Times in Minutes 20, 15, 15 15, 15, 15 Raw Materials Needed RM-1, RM-2 RM-2, RM-3 Raw Materials Costs RM-1 = $40/unit, RM-2 or RM-3 = $20/unit Each product uses raw materials with costs as shown in the above table where the processing times and the machine required for each operation are also shown. Each machine is available 4,800 minutes per week. There are no system foul-ups. Demand is deterministic (i. e., no uncertainty). Operating expenses, including labor (but excluding raw materials) total $12,000 per week. Assuming market is not a constraint, which machine (resource) is the constraint in this plant? Why? With the machine (resource) identified as constraint in (a) above, what product mix provides the highest profit? How much is this maximum profit? In order to exploit the constraint identified in (b) above, is market demand a constraint for maximizing profits? Why or why not?

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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The Holt Million Corporation’s plant manufactures two different products: X and Y. The plant has three different machines: A, B, and C. Each performs different tasks and can work on only one unit of material at a time. Details for each product are shown in the table below:

Product	X	Y
Demand Per Week	200 units	100 units
Selling Price	$150	$160
Machine Operation Required	A, B, C	B, B, C
Operation Times in Minutes	20, 15, 15	15, 15, 15
Raw Materials Needed	RM-1, RM-2	RM-2, RM-3
Raw Materials Costs	RM-1 = $40/unit, RM-2 or RM-3 = $20/unit

Each product uses raw materials with costs as shown in the above table where the processing times and the machine required for each operation are also shown. Each machine is available 4,800 minutes per week. There are no system foul-ups. Demand is deterministic (i. e., no uncertainty). Operating expenses, including labor (but excluding raw materials) total $12,000 per week.

Assuming market is not a constraint, which machine (resource) is the constraint in this plant? Why?
With the machine (resource) identified as constraint in (a) above, what product mix provides the highest profit? How much is this maximum profit?
In order to exploit the constraint identified in (b) above, is market demand a constraint for maximizing profits? Why or why not?

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