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 demand is a constraint, how much additional profit can be made by relaxing this constraint? Please justify your answer.

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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.

  1. Assuming market demand is a constraint, how much additional profit can be made by relaxing this constraint? Please justify your answer.
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