The management of Hartman Company is attempting to find amount of each of 2 products to produce over coming planning period. Given information concerns labor utilization, labor availability and product profitability.
|
Product |
Product |
|
| Department |
1 |
2 |
Labor-Hours Available |
| A |
1.00 |
0.35 |
100 |
| B |
0.30 |
0.20 |
36 |
| C |
0.20 |
0.50 |
50 |
| Profit contribution/unit |
$30.00 |
$15.00 |
|
i) Create the linear programming model of Hartman Company problem. Solve model to find out optimal production quantities of products 1 and 2.
ii) In computing profit contribution per unit, management does not reduce labor costs as they are considered fixed for upcoming planning period. Though, assume that overtime can be scheduled in some of department. Which departments would you suggest scheduling for overtime? How much would you be eager ot pay per hour of overtime in every department?
c.) Assume that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C, respectively. Cost per hour of overtime is $18 in the department A, $22.50 in the department B, and $12 in the department C. Formulate the linear programming model which can be utilized to find out optimal production quantities if overtime is made available. Find optimal production quantities, and find revised total contribution to profit? How much overtime do you suggest using in every department? Find increase in total contribution to profit if overtime is utilized?