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    Group 5 Case-Analysis-ManSci-Linear-Programming-Simplex-Method

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    Nicole Concepcion
    The optimal product mix for the company is to produce 52 units of product x per month, with a total monthly contribution of ₱18,720. The company does not produce any units of product y under the optimal mix. Renting out unused capacity of Machine 2 for ₱10 per hour would increase monthly profits by ₱800. To produce two additional units of product y next month as requested by a customer, the company would need to reduce production of product x by 2.4 units.

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    Group 5 Case-Analysis-ManSci-Linear-Programming-Simplex-Method

    Uploaded by

    Nicole Concepcion
    24 views3 pages
    The optimal product mix for the company is to produce 52 units of product x per month, with a total monthly contribution of ₱18,720. The company does not produce any units of product y under the optimal mix. Renting out unused capacity of Machine 2 for ₱10 per hour would increase monthly profits by ₱800. To produce two additional units of product y next month as requested by a customer, the company would need to reduce production of product x by 2.4 units.

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    The optimal product mix for the company is to produce 52 units of product x per month, with a total monthly contribution of ₱18,720. The company does not produce any units of product y under the optimal mix. Renting out unused capacity of Machine 2 for ₱10 per hour would increase monthly profits by ₱800. To produce two additional units of product y next month as requested by a customer, the company would need to reduce production of product x by 2.4 units.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    24 views3 pages

    Group 5 Case-Analysis-ManSci-Linear-Programming-Simplex-Method

    Uploaded by

    Nicole Concepcion
    The optimal product mix for the company is to produce 52 units of product x per month, with a total monthly contribution of ₱18,720. The company does not produce any units of product y under the optimal mix. Renting out unused capacity of Machine 2 for ₱10 per hour would increase monthly profits by ₱800. To produce two additional units of product y next month as requested by a customer, the company would need to reduce production of product x by 2.4 units.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Case Analysis

    Name: Kyla Nicole R. Concepcion Section: ACT214 Date: October 25, 2021

    We have a product mix problem where we can produce product x and / or product y. We have two
    machines 1 and 2, which are both used in production of x and y. Let us define:
    number of units of x produced
    x=
    month

    number of units of y produced


    y=
    month

    The contribution per unit of x is P360, and the contribution per unit of y is P400. With slack terms
    added, our problem is:

    To maximize Z = P360x + P400y +P0S1 + P0S2

    Subject to: 5x + 6y + S1 + 0S2 = 260 hours / month Machine 1 constraint

    3x + 2y + 0S1 + S2 = 300 hours / month Machine 2 constraint

    The optimal table is reached for this problem as follows:

    Cj P 360 P 400 0 0
    PM Qty x y S1 S2
    360 x 52 1 6/5 1/5 0

    0 S2 114 0 -8/5 -3/5 1


    ZJ P18,720 360 432 72 0

    Cj – Zj 0 - 32 -72 0

    Assuming you can produce at the optimal mix, answer the following:
    1. How many of each product is produced per month and what is the total monthly contribution?

    X= 52 Units per month

    S2 = 114 hours

    Profit = ₱18,720

     Since y is not in the product mix column, the company is not producing any y at all. (y = 0 unit
    per month)

    2. A manufacturer offers P10 per hour as rental fee for using Machine 2. He will use machine 2
    for 80 hours per month. Will you accept the offer?

     The S2, which is 114 hours, refers to the available hours for machine 2. This indicates that it is
    not used in full capacity. Thus, the rent of ₱10 for 80 hours per month will increase the profit
    or contribution of the company. This will lead to an increase of ₱800 in our profit. As a result,
    the company will accept the offer.

    3. One of your customers wishes to purchase two units of y next month. Upon discovering that
    you do not produce any y’s he offers to pay you, so that your profit will not be reduced. How
    much increase in the price will he be paying?

     The customer needs to pay an additional ₱32 in order to retain the target profit of ₱18,720.
    Therefore, the total payment of the customer should be ₱432.

    Zj = 49.6 (360) + 2 (432) = ₱18,720


    4. Assuming you agree to produce the two units of y next month, how many units of x must be
    deleted from the next month’s production schedule?

     To produce a y, we will be needing 6/5 units of x. Therefore, if the company agrees to


    produce 2 units of y next month, we will need to delete 2.4 units of x (2 x 6/5) for the next
    month’s production schedule.

    52 units – 2.4 units = 49.6 units of x

    X = 49.6 units per month

    Y = 2 units per month

    S2 = 114 hours

    Profit = 18,720

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