Merton also has the option of increasing engine capacity by 2,000 hours using overtime. Technology could also play an important role in reducing the time and costs needed to produce the vehicles, so it is important that Merton maintain a watchful eye on new production methods and machinery. The goal is to maximize total profit. The optimal product mix was calculated to be 2000 units of model 101 and 1000 units of model 102. Data Used in Analysis: Merton Truck Company provided the data used in the analysis. At this point, 2857 units of the truck 103 and 857 units of truck 102 will be produced. .
The data provided by the company included the fixed costs; however, the fixed costs should not be considered when calculating the contribution for each model. Words: 279 - Pages: 2. Livingston thought it would lead people more likely to use public transportation. Contributing to In-N-Outs quality food is its well-trained and friendly staff. So x1 and x2 would be 1500 nos trucks.
Method: For finding the product mix that maximizes contribution a linear programming model was prepared using, maximize monthly contribution as the objective function, number of model 101 trucks and number of model 102 trucks as the decision variables, the analysis was bound to the constraints of requirement and availability of machine hours for engine assembly, metal stamping, Model 101 assembly and Model 102 assembly refer attachments figure 1 Contribution per unit was found out by using the total revenue…. Maybe they can acquire machines from outside suppliers and release the capacity problems in its engine assembly department to the truck model 102. Figure 1 shows the contribution received for producing one truck of Models 101 and 102. Words: 1500 - Pages: 6. Decision variables help us do exactly that, make decisions.
Merton should also consider the impact that learning curves and technology may have on their production process. The optimal product mix for Merton given their current product mix and constraints has been determined, but Merton is also considering the addition of a new Model 103. Based on the capacity information, it was determined that Model 103 would require 0. The supplied variable costs per unit and fixed costs per unit were used to calculate the contribution for each model. Words: 7734 - Pages: 31. .
. Words: 622 - Pages: 3. . To determine the best course of action for the company, an in-depth analysis of their current practices and optimal position is required. Words: 12583 - Pages: 51. This benefit allows for the company to better utilize their resources, and to determine the optimal product mix.
Currently, Merton produces 1,000 of Model 101 trucks and 1,500 of Model 102 trucks. One important point concerns the Problem Name. The extreme points corresponding to the non-negativity, Model 102 Assembly, and Model 101 Assembly constraints were easy to identify, and the rest was determined by simultaneously solving the equations of intersecting lines. The name must satisfy Excel's restrictions for naming ranges, that is: the names must not contain spaces, they must start with a letter and they may not include punctuation marks. These changes allowed Federal Express to use larger aircraft. Allocation base is on the basis of 1000 unit so of model 101 and 1500 units of model 2. Although the company is profiting on each Model 102 sold, maxing out capacity for this model may not be the best solution, as suggested by the controller.
. At the moment, the production facilities are maximizing the engine assembly capacity. The company is contemplating stopping the production of model 101 trucks. General Managers make over 100,000 a year, receive bonuses, and if requirements are met sent on luxury vacations. Executive Summary The Problem: Merton Truck Company has been experiencing difficulties related to their financial performance, and they do not know which is the optimal product mix to maximize profits and performance. It has several distinct advantages over a traditional eat-in restaurant.
Plugging this product mix into our objective equation shows that contribution actually decreases. It is available for the Network Flow Programming or Transportation model types. Selecting an item from this list causes a dialog box to be presented which constructs a mathematical programming model. Allocation base in this case is proportion of capacity utilized by respective models. If Merton can rent capacity for less than the shadow price for either department, it should. Trucks account for 70 percent of freight transported in the United States with several trillion dollars of cargo… accounts may not come to light, it will not be construed as failure of audit, provided the auditor was not negligent in the carrying out his normal work. Case objective: The objective of this case is to cover financial statement analysis and cash flow analysis, with a particular emphasis on liquidity and net working capital.
An extended version of this article appears in Project Management Journal, March 2000. . Simply producing more or less of either model will do one of two things. Words: 1020 - Pages: 5. Once the data had been entered, the Solver function was run.