Prepare a report that addresses the following issues: 1. The optimal quantities of products and the

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QUESTION:

Prepare a report that addresses the following issues:

1. The optimal quantities of products and the necessary quantities of labor and materials.

2. One proposal is to make equal amounts of the products. What amount of each will maximize contribution, and what quantities of labor and materials will be needed? How much less will the total contribution be if this proposal is adopted?

3. How would you formulate the constraint for material A if it was determined that there is a 5 percent waste factor for material A and equal quantities of each product are required?

Son, Ltd., manufactures a variety of chemical products used by photo-processors. Son was recently bought out by a conglomerate, and managers of the two organizations have been working together to improve the efficiency of Son’s operations. Managers have been asked to adhere to weekly operating budgets and to develop operating plans using quantitative methods whenever possible. The manager of one department has been given a weekly operating budget of $ 11,980 for the production of three chemical products, which for convenience shall be referred to as Q, R, and W. The budget is intended to pay for direct labor and materials. Processing requirements for the three products, on a per-unit basis, are shown in the table. The company has a contractual obligation for 85 units of product R per week.


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