## (solution) Assignment - Linear Programming Kaplan Computers manufactures

Assignment ? Linear Programming

Kaplan Computers manufactures high end computer systems for the graphics design industry.  At the present time, the company makes three computers with the following characteristics:

 Computer 1 Computer 2 Computer 3 Unit selling price \$12,000 \$11,000 \$10,000 Unit variable cost 7,000 8,500 8,000

The manufacture of the computers requires three major activities during their assembly.  There is limited capacity for each resource.  The following table shows the amount of each resource consumed by each computer and  the capacity available of that resource.

 Computer 1 Computer 2 Computer 3 Capacity Resource A 3 4 6 24,000 Resource  B 5 6 2 36,000 Resource C 8 3 2 32,000

Additional resources are available, but need to be purchased in 1,000 unit increments.

Required:

Assume that demand for each product exceeds the capacity available.  Choose a production plan that maximizes contribution.Assume that, for marketing purposes, Kaplan needs to manufacture at least 300 units of each product. Choose a production plan that maximizes contribution. Refer to the situation as describe in part 2.  By how much would the contribution increase if an additional unit of Resource A became available?Refer to the situation as described in part 2.  You can purchase extra units of Resources A, B and C  as follows:

Amount Available

Cost per 1,000 units

Resource A

In addition to the extra resources available as described in part4, a different supplier has offered to supply an additional 1,000 units of Resource C, at a cost of \$750,000. Should Kaplan accept the offer or not?  You must biuy all 1,000 units or none at all.  Provide quantitative support.
BUSI 354

Assignment ? Linear Programming

Kaplan Computers manufactures high end computer systems for the graphics design industry. At

the present time, the company makes three computers with the following characteristics:

Unit selling price

Unit variable cost Computer 1

\$12,000

7,000 Computer 2

\$11,000

8,500 Computer 3

\$10,000

8,000 The manufacture of the computers requires three major activities during their assembly. There is

limited capacity for each resource. The following table shows the amount of each resource

consumed by each computer and the capacity available of that resource. Resource A

Resource B

Resource C Computer 1

3

5

8 Computer 2

4

6

3 Computer 3

6

2

2 Capacity

24,000

36,000

32,000 Additional resources are available, but need to be purchased in 1,000 unit increments.

Required:

1. Assume that demand for each product exceeds the capacity available. Choose a

production plan that maximizes contribution.

2. Assume that, for marketing purposes, Kaplan needs to manufacture at least 300 units of

each product. Choose a production plan that maximizes contribution.

3. Refer to the situation as describe in part 2. By how much would the contribution increase

if an additional unit of Resource A became available?

4. Refer to the situation as described in part 2. You can purchase extra units of Resources A,

B and C as follows: Resource A

Resource B

Resource C Amount Available

3,000

2,000

1,000 Cost per 1,000 units

\$22,000

\$250,000

\$625,000 How much of each resource should Kaplan acquire? By doing so, what is the incremental

contribution that can be obtained? What quantity of each computer will now be made?

5. In addition to the extra resources available as described in part4, a different supplier has

offered to supply an additional 1,000 units of Resource C, at a cost of \$750,000. Should

Kaplan accept the offer or not? You must biuy all 1,000 units or none at all. Provide

quantitative support.

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Sep 13, 2020

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