Posted by Linda on Saturday, January 29, 2011 at 1:32pm.
COMPUTER PRODUCTION
MVE Enterprises can manufacture four different computer models; the Student, Plus, Net, and Pro models. The following gives the configurations of each model:
STUDENT PLUS NET PRO
Processor Celeron Celeron Celeron Pentium
Hard Drive 20 gb 20 gb 20 gb 30 gb
Floppy Drives 1 1 2 1
Zip Drives Yes Yes No Yes
Audio/Video CD R/W DVD DVD +
CD R/W DVD +
CD R/W
Monitor 15” 15” 17” 17”
Case Tower Mini-
Tower Mini-
Tower Tower
Production
Time (hrs.) .4 .5 .6 .8
Unit Profit $70 $80 $130 $150
MVC must satisfy a contract that produces a minimum of 100 Net models per week
MVC employs 25 workers, each of whom averages 30 production hours each per week
The following resources are available weekly:
Processors Hard Drives Other Drives
Celeron - 700 20 gb – 800 Floppy – 1600
Pentium - 550 30 gb – 950 Zip – 1000
Audiovisual Monitors Cases
CD / R/W – 1600 15” – 850 Mini – Tower – 1250
DVD – 900 17” – 800 Tower - 750
a. Determine the optimal weekly production schedule for MVC. What is the optimal weekly profit?
b. What is the minimum price that would justify producing the Plus model? Explain.
c. If MVC could purchase additional 17” monitors for $15 more than what they are currently paying for them, should they do this? Explain.
d. Suppose an additional worker could be hired for $1000 per week over the existing weekly worker salary. (Recall that workers average 30 hours per week.) Should MVC do this? Explain.
Develop a 2-3 page business Memorandum to detail your answers and recommendations
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