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Case: Anderson Electronics: Questions

Anderson Electronics is considering producing four products: VCRs, stereos, TVs, and DVD players. The required electronic components, non-electronic components, and assembly time for each product is shown. Electronic components cost $10 per unit, non-electronic components cost $5 per unit, and assembly time costs $0.50 per hour. Profits will be maximized by determining the optimal production quantities for each product given limited resource availability and costs.

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Jigyasa Gautam
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306 views1 page

Case: Anderson Electronics: Questions

Anderson Electronics is considering producing four products: VCRs, stereos, TVs, and DVD players. The required electronic components, non-electronic components, and assembly time for each product is shown. Electronic components cost $10 per unit, non-electronic components cost $5 per unit, and assembly time costs $0.50 per hour. Profits will be maximized by determining the optimal production quantities for each product given limited resource availability and costs.

Uploaded by

Jigyasa Gautam
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Case: Anderson Electronics

Anderson electronics is considering the production of four potential products: VCRs, Stereos, TVs and DVD players. For the sake of this study, let us assu e that the inputs for all products can !e "ie#ed in ter s of three resources: electronic co ponents, non$electronics co ponents and asse !ly ti e. The co position of four products in ter s of these three inputs is sho#n !elo#. VCR Elec. Co ponents )on$Elec. Co ponents Asse !ly ti e ,hoursSelling price ,per unit% Stereo & * . '( & * . /( TV % & % .+( % * ..( DVD player &'(( &+(( *+(( Supply

Electronics co ponents can !e o!tained at 0' per unit1 non$electronics co ponents can !e o!tained at 0+ per unit1 asse !ly ti e costs 0.( per hour. Each resource is a"aila!le in li ited 2uantities as sho#n a!o"e. Questions: For ulate 34 as a5i i6ation of profit.

7hat if the supply of nonelectrical co ponents changes8 7hat happens if the supply of electrical co ponents 9ncreased !y &(( ,to +.((-8 9ncreased !y &((( ,to /'((-8 ore than

7hat if #e could !uy an additional &(( elec. co ponents for 0. usual8 7ould #e #ant to !uy the 8

7hat if #e could get an additional *+( hours of asse !ly ti e !y paying 0+ per hour ore than usual8 7ould this !e profita!le8 7e are not currently aking any VCR:s ,V;(- !ecause they are not profita!le enough. <o# uch #ould profit need to increase !efore #e #ould #ant to !egin aking VCR:s8 For #hat range of profit contri!utions for DVD players #ill the current solution re ain opti al8 7hat happens to profit if this "alue drops to 0+( per DVD player8

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