Can and Deniz, Inc. (C&D) manufactures three different products: Standard (ST), Superior (Sup), and Premium (PR). C&D just received a new order for all of the products: 300 units of ST; 700 units of Sup; and 400 units of PR. Currently, there is no inventory of any of the products. All three products require special processing that can be conducted on one of the two machines. The cost of producing each product on each machine is summarized in the following table: 3 1 INPUTS 2 Cost of Producing a Unit of Product SL TL TLF Machine $1.60 $1.80 $2.00 4 1 Machine $1.20 $2.40 $1.60 2 Cost of Producing a Unit of Product ST Machine 1 Machine 2 $1.60 $1.20 Sup $1.80 $2.40 PR $2.00 $1.60 569 % 7 Time (Hours) Needed to Produce a Unit of Overall Available 8 Product Hours The time required to produce each product on each machine is summarized in the following table: 9 SL TL TLF Machine 0.2 0.4 0.5 300 Time (Hours) Needed to Produce a Unit of Product 10 1 Machine ST Sup PR 0.25 0.6 0.7 11 2 350 Machine 1 Machine 2 0.2 0.40 0.50 12 0.25 0.60 0.70 13 14 The available hours for Machine 1 and Machine 2 are 300 hours and 350 hours, respectively. 15 Order Size SL 300.00 TL 700.00 TLF 400.00 700.00
Can and Deniz, Inc. (C&D) manufactures three different products: Standard (ST), Superior (Sup), and Premium (PR). C&D just received a new order for all of the products: 300 units of ST; 700 units of Sup; and 400 units of PR. Currently, there is no inventory of any of the products. All three products require special processing that can be conducted on one of the two machines. The cost of producing each product on each machine is summarized in the following table: 3 1 INPUTS 2 Cost of Producing a Unit of Product SL TL TLF Machine $1.60 $1.80 $2.00 4 1 Machine $1.20 $2.40 $1.60 2 Cost of Producing a Unit of Product ST Machine 1 Machine 2 $1.60 $1.20 Sup $1.80 $2.40 PR $2.00 $1.60 569 % 7 Time (Hours) Needed to Produce a Unit of Overall Available 8 Product Hours The time required to produce each product on each machine is summarized in the following table: 9 SL TL TLF Machine 0.2 0.4 0.5 300 Time (Hours) Needed to Produce a Unit of Product 10 1 Machine ST Sup PR 0.25 0.6 0.7 11 2 350 Machine 1 Machine 2 0.2 0.40 0.50 12 0.25 0.60 0.70 13 14 The available hours for Machine 1 and Machine 2 are 300 hours and 350 hours, respectively. 15 Order Size SL 300.00 TL 700.00 TLF 400.00 700.00
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...
Related questions
Question
Part a: Develop a spreadsheet model for calculating the optimal production plan for these three
products. Please adhere to the spreadsheet engineering principles and show all your work (formulas).
What is the optimal production plan to meet the demand?
Part b: Please comment on the marginal value (shadow price) of available hours for Machine 1
and Machine 2. If you have the opportunity to increase the capacity of one machine, which machine’s
capacity would you increase? By How much? How much benefit (cost reduction) this capacity change
would bring to C&D Inc.? Please explain in detail.
Transcribed Image Text:Can and Deniz, Inc. (C&D) manufactures three different products: Standard (ST), Superior (Sup), and
Premium (PR). C&D just received a new order for all of the products: 300 units of ST; 700 units of Sup;
and 400 units of PR. Currently, there is no inventory of any of the products. All three products require
special processing that can be conducted on one of the two machines. The cost of producing each product
on each machine is summarized in the following table:
3
1
INPUTS
2
Cost of Producing a Unit of Product
SL
TL
TLF
Machine
$1.60
$1.80
$2.00
4
1
Machine
$1.20
$2.40
$1.60
2
Cost of Producing a Unit of Product
ST
Machine 1
Machine 2
$1.60
$1.20
Sup
$1.80
$2.40
PR
$2.00
$1.60
569 %
7
Time (Hours) Needed to Produce a Unit of
Overall Available
8
Product
Hours
The time required to produce each product on each machine is summarized in the following table:
9
SL
TL
TLF
Machine
0.2
0.4
0.5
300
Time (Hours) Needed to Produce a Unit of Product
10
1
Machine
ST
Sup
PR
0.25
0.6 0.7
11
2
350
Machine 1
Machine 2
0.2
0.40
0.50
12
0.25
0.60
0.70
13
14
The available hours for Machine 1 and Machine 2 are 300 hours and 350 hours, respectively.
15
Order Size
SL
300.00
TL
700.00
TLF
400.00
700.00
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