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Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows: Component 1 2 3 Shaper 6 4 Machine 4 Grinder 4 5 2 The shaper is available for 120 hours, and the grinder for 110 hours. No more than 250 units of component 3 can be sold, but up to 1,000 units of component 1 and up to 1,000 units of component 2 can be sold. In fact, the company already has orders for 550 units of component 1 that must be satisfied. The per unit selling price and per unit variable costs for each of the three components are as follows:

Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows: Component 1 2 3 Shaper 6 4 Machine 4 Grinder 4 5 2 The shaper is available for 120 hours, and the grinder for 110 hours. No more than 250 units of component 3 can be sold, but up to 1,000 units of component 1 and up to 1,000 units of component 2 can be sold. In fact, the company already has orders for 550 units of component 1 that must be satisfied. The per unit selling price and per unit variable costs for each of the three components are as follows:

Practical Management Science
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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(c) What are the right-hand-side ranges? Constraint 1 2 Right-Hand-Side Range Select your answer - ✓to Select your answer - ✓ Select your answer to - Select your answer Interpret these ranges for company management. These are the ranges over which the shadow prices for the associated constraints Select your answer - applicable. (d) If more time could be made available on the grinder, how much would it be worth? Explain. Select your answer - because the constraint related to the time available on the grinder Select your answer - binding. (e) If more units of component 3 can be sold by reducing the sales price by $4, should the company reduce the price? I - Select your answer - ✓ because the production of component 3 would be - Select your answer - profitable than the production of the other two components and at the reduced price Select your answer - ✓of component 3 would be produced.
Transcribed Image Text:(c) What are the right-hand-side ranges? Constraint 1 2 Right-Hand-Side Range Select your answer - ✓to Select your answer - ✓ Select your answer to - Select your answer Interpret these ranges for company management. These are the ranges over which the shadow prices for the associated constraints Select your answer - applicable. (d) If more time could be made available on the grinder, how much would it be worth? Explain. Select your answer - because the constraint related to the time available on the grinder Select your answer - binding. (e) If more units of component 3 can be sold by reducing the sales price by $4, should the company reduce the price? I - Select your answer - ✓ because the production of component 3 would be - Select your answer - profitable than the production of the other two components and at the reduced price Select your answer - ✓of component 3 would be produced.
Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows: Component 1 2 3 1 2 Shaper 6 4 3 Machine 4 Grinder 4 The shaper is available for 120 hours, and the grinder for 110 hours. No more than 250 units of component 3 can be sold, but up to 1,000 units of component 1 and up to 1,000 units of component 2 can be sold. In fact, the company already has orders for 550 units of component 1 that must be satisfied. The per unit selling price and per unit variable costs for each of the three components are as follows: 5 Component Selling price Material Cost Labor Cost $26 T⠀⠀ $18 $26 2 $12 $8 $13 $5 $4 $5 (a) For each component, calculate the profit margin (profit margin Component 1: $ 600 Component 2: $ 700 Component 3: $ 200 = selling price - material cost - labor cost). Formulate and solve the model to determine the maximum profit. If the constant is "1", it must be entered in the box. If an amount is zero, enter "0". Let C1 = units of component 1 manufactured C2 = units of component 2 manufactured C3 = units of component 3 manufactured
Transcribed Image Text:Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows: Component 1 2 3 1 2 Shaper 6 4 3 Machine 4 Grinder 4 The shaper is available for 120 hours, and the grinder for 110 hours. No more than 250 units of component 3 can be sold, but up to 1,000 units of component 1 and up to 1,000 units of component 2 can be sold. In fact, the company already has orders for 550 units of component 1 that must be satisfied. The per unit selling price and per unit variable costs for each of the three components are as follows: 5 Component Selling price Material Cost Labor Cost $26 T⠀⠀ $18 $26 2 $12 $8 $13 $5 $4 $5 (a) For each component, calculate the profit margin (profit margin Component 1: $ 600 Component 2: $ 700 Component 3: $ 200 = selling price - material cost - labor cost). Formulate and solve the model to determine the maximum profit. If the constant is "1", it must be entered in the box. If an amount is zero, enter "0". Let C1 = units of component 1 manufactured C2 = units of component 2 manufactured C3 = units of component 3 manufactured
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