1. The M-N plant manufactures two different products: M and N. Selling prices and weekly market demands are shown in the following diagram. Each product uses raw materials with costs as shown. The plant has three different machines: A, B, and C. Each performs different tasks and can work on only one unit of material at a time. (see attached photo)
Process times for each task are shown in the diagram. Each machine is available 3,500 minutes per week. There are no “Murphys” (major opportunities for the system to foul up). Setup and transfer times are zero. Demand is constant.
Operating expenses (including labor) total a constant $12,000 per week. Raw materials are not included in weekly operating expenses.
a. Which machine is the constraint in this plant?
Machine A
Machine B
Machine C
b. Which product mix provides the highest gross profit? (Hint: consider raw material cost but not operating expense) – in units
Product M:
Product N:
c. What is the maximum weekly net profit this plant can earn using the product mix from Part b? (Hint: consider operating expense and raw material cost)
Weekly Net Profit
2. For the four basic configurations that follow, assume that the market is demanding product that must be processed by both Resource X and Resource Y for Cases I, II, and III. For Case IV, both resources supply separate but dependent markets; that is, the number of units of output from both X and Y must be equal.
Plans are being made to produce a product that requires 40 minutes on Resource X and 30 minutes on Resource Y. Assume that there is only one of each of these resources and that market demand is 1,260 units per month.
a. How many hours of production time would you schedule for X and Y, assuming unlimited storage?
X (hours) Y (hours)
CASE1
CASE 2
CASE 3
CASE 4
CASE 5
b. What would happen if Y is also scheduled for the same production hours of X? Choose one of the following for each case: no problem, excess finished goods, excess WIP (excess spare parts)
CASE1
CASE 2
CASE 3
CASE 4
CASE 5