The M-N plant manufactures two different products: M and N. Selling prices and weekly market demands are shown in the following diagram. Each product uses raw materials with costs as shown. 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. Resources: A, B, C (one each) Availability: 3,800 min./week Operating expense: $12,000/week Product M $190/unit 120 units/week 15 min./unit Product N $200/unit 80 units/week 15 min./unit

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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b. Which product mix provides the highest gross profit? (Hint: consider raw material cost but not operating expense)
Product M
Product N
Product mix
units
units
c. What is the maximum weekly net profit this plant can earn using the product mix from Part b? (Hint: consider operating expense and
raw material cost)
Weekly net profit
Transcribed Image Text:b. Which product mix provides the highest gross profit? (Hint: consider raw material cost but not operating expense) Product M Product N Product mix units units c. What is the maximum weekly net profit this plant can earn using the product mix from Part b? (Hint: consider operating expense and raw material cost) Weekly net profit
The M-N plant manufactures two different products: M and N. Selling prices and weekly market demands are shown in the following
diagram. Each product uses raw materials with costs as shown. 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.
Resources: A, B, C (one each)
Availability: 3,800 min./week
Operating expense: $12,000/week
Product M
$190/unit
120 units/week
Machine A
Machine C
Machine B
15 min./unit
A
20 min./unit
RM-1
$60/unit
Product N
$200/unit
80 units/week
15 min./unit
B
10 min./unit
RM-2
$40/unit
B
10 min./unit
RM-3
$40/unit
Process times for each task are shown in the diagram. Each machine is available 3,800 minutes per week. There are no "Murphys"
(major opportunities for the system to foul up). Setup and transfer times are zero. Demand is constant.
Operating expenses (including labor) total a constant $12,000 per week. Raw materials are not included in weekly operating expenses.
a. Which machine is the constraint in this plant?
Transcribed Image Text:The M-N plant manufactures two different products: M and N. Selling prices and weekly market demands are shown in the following diagram. Each product uses raw materials with costs as shown. 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. Resources: A, B, C (one each) Availability: 3,800 min./week Operating expense: $12,000/week Product M $190/unit 120 units/week Machine A Machine C Machine B 15 min./unit A 20 min./unit RM-1 $60/unit Product N $200/unit 80 units/week 15 min./unit B 10 min./unit RM-2 $40/unit B 10 min./unit RM-3 $40/unit Process times for each task are shown in the diagram. Each machine is available 3,800 minutes per week. There are no "Murphys" (major opportunities for the system to foul up). Setup and transfer times are zero. Demand is constant. Operating expenses (including labor) total a constant $12,000 per week. Raw materials are not included in weekly operating expenses. a. Which machine is the constraint in this plant?
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