A company has 100,000 hours of capacity and manufactures two products, Product X and Product Z. Neither product has enough demand to utilize the entire capacity, but the combined demand of both products exceeds the capacity of the plant
It takes one hour to make one unit of Product X and two hours to make one unit of Product Z. The following information is available:
Product X Product Z
Units produced from capacity available 100,000 50,000
Contribution margin per unit $20 $30
What product or products should be made?
A) only make Product X
B) only make Product Z
C) make Product X to meet customer demand and then make Product Z
D) make Product Z to meet customer demand and then make Product X
C
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Which of the following is a characteristic of a facility with excess capacity?
A) Will likely be more efficient per unit of product it produces than one with a lot of unused capacity B) Would be very flexible and respond to wide swings in the demands placed on it C) Would be considered a high utilization facility D) Will have difficulty responding to demand fluctuations
Ivana Miracle wishes to invest up to her full inheritance of $300,000, and her goal is to minimize her risk subject to an expected annual return of at least $30,000
She has decided to invest her money in any of three possible ways—CDs, which pay a guaranteed 6 percent; stocks, which have an expected return of 15 percent; and a money market mutual fund, which is expected to return 8 percent. Risk factors are 1.0 for the CDs, 3.6 for the stocks, and 1.8 for the money market fund. Formulate this as a linear program.