Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter D, Problem 1DQ
Summary Introduction

Interpretation: The information required to decide whether the management needs to rent a warehouse is to be determined. Also, the ways in which the linear programming model can be helpful is to be determined.

Concept Introduction:When there are more than two variables (behaving linearly) in a problem in which an objective function is to be optimized, the problem can be solved through linear programming. The solution will also indicate the critical and non-critical variables (called constraints). Thus the impact of any variation of the critical constraints can also be assessed.

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Answer to Problem 1DQ

The inferenceof not taking another warehouse on rent (at whatever rate) can be derived from this model.

Explanation of Solution

Given information:

  1. Three equal to or less than constraints.
  2. The two critical constraints of raw material and labour costs.
  3. Availability of a warehouse at cheap rates.
  1. The management needs to know whether storage space is a binding constraint. It is not, because the intersection of labour hours and raw materials is the optimal solution.

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