An Elaborative ExampleThe WYNDOR GLASS CO. produces high-quality glass products, including windows andglass doors. It has three plants. Aluminum frames and hardware are made in Plant 1, woodframes are made in Plant 2, and Plant 3 produces the glass and assembles the products.Because of declining earnings, top management has decided to revamp the company'sproduct line. Unprofitable products are being discontinued, releasing production capacityto launch two new products having large sales potential:Product 1: An 8-foot glass door with aluminum framingProduct 2: A 4 X 6 foot double-hung wood-framed windowProduct 1 requires some of the production capacity in Plants 1 and 3, but none in Plant 2.Product 2 needs only Plants 2 and 3. The marketing division has concluded that the com-pany could sell as much of either product as could be produced by these plants. However,because both products would be competing for the same production capacity in Plant 3, itis not clear which mix of the two products would be most profitable. Therefore, an ORteam has been formed to study this question. An Elaborative Example(cont.)The OR team began by having discussions with upper management to identify man-agement's objectives for the study. These discussions led to developing the following defi-nition of the problem:Determine what the production rates should be for the two products in order to maximizetheir total profit, subject to the restrictions imposed by the limited production capacitiesavailable in the three plants. (Each product will be produced in batches of 20, so theproduction rate is defined as the number of batches produced per week.) Any combinationof production rates that satisfies these restrictions is permitted, including producing noneof one product and as much as possible of the other.

Name: An Elaborative ExampleThe WYNDOR GLASS CO. produces high-quality glas
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Description: An Elaborative ExampleThe WYNDOR GLASS CO. produces high-quality glass products, including windows andglass doors. It has three plants. Aluminum frames and hardware are made in Plant 1, woodframes are made in Plant 2, and Plant 3 produces the glass

The WYNDOR GLASS CO. produces high quality products but with the declining earningsthey decided to…

Business

Management

The OR team began by having discussions with upper management to identify man- nent's objectives for the study. These discussions led to developing the following defi- on of the problem: Determine what the production rates should be for the two products in order to maximize their total profit, subject to the restrictions imposed by the limited production capacities available in the three plants. (Each product will be produced in batches of 20, so the production rate is defined as the number of batches produced per week.) Any combination of production rates that satisfies these restrictions is permitted, including producing none of one product and as much as possible of the other.

The OR team began by having discussions with upper management to identify man- nent's objectives for the study. These discussions led to developing the following defi- on of the problem: Determine what the production rates should be for the two products in order to maximize their total profit, subject to the restrictions imposed by the limited production capacities available in the three plants. (Each product will be produced in batches of 20, so the production rate is defined as the number of batches produced per week.) Any combination of production rates that satisfies these restrictions is permitted, including producing none of one product and as much as possible of the other.

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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