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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787 Exercise 10
CONSTRAINED OPTIMIZATION: MULTIPLE INTERNAL CONSTRAINTS
Fisher Company produces two types of components for airplanes: A and B, with unit contribution margins of $200 and $400, respectively. The components pass through three sequential processes: cutting, welding, and assembly. Data pertaining to these processes and market demand are given on the following page (weekly data).
Required:
1. Express Fisher Company's constrained optimization problem as a linear programming model.
2. Using a graphical approach, solve the linear programming model expressed in Requirement 1. Which constraints are binding?
3. What if Fisher Company had five additional machine hours (cutting) with all other resources held constant? What is the new optimal mix and associated total contribution margin? What is the incremental benefit per machine hour caused by the additional five hours, if any?
Fisher Company produces two types of components for airplanes: A and B, with unit contribution margins of $200 and $400, respectively. The components pass through three sequential processes: cutting, welding, and assembly. Data pertaining to these processes and market demand are given on the following page (weekly data).
Required:
1. Express Fisher Company's constrained optimization problem as a linear programming model.
2. Using a graphical approach, solve the linear programming model expressed in Requirement 1. Which constraints are binding?
3. What if Fisher Company had five additional machine hours (cutting) with all other resources held constant? What is the new optimal mix and associated total contribution margin? What is the incremental benefit per machine hour caused by the additional five hours, if any?
Explanation
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We are given the data pertaining to two ...
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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