The Great American Mill Company produces five different fabrics. Each fabric can be woven on one or more of the mills 38 looms. The sales department has forecast demand for the next month. The demand data are shown below along with data on the selling price per yard and the variable cost per yard. The mill operates 24 hours per day and is scheduled for 30 days during the coming month.
Table 1: Monthly Demand, Price, Variable Cost, and Purchase Price Data
Fabric Demand
(yards)
Selling Price
($ / yard)
Variable Cost
($ / yard)
Purchase Price
($ / yard)
1 16,500 0.99 0.66 0.80
2 22,000 0.86 0.55 0.70
3 62,000 1.10 0.49 0.60
4 7,500 1.24 0.51 0.70
5 62,000 0.70 0.50 0.70
The mill has two types of looms: dobbie and regular. The dobbie looms are more
versatile and can be used for all five fabrics. The regular looms can produce only three of
the fabrics. There are a total of 38 looms 8 dobbie and 30 regular. The rate of
production for each fabric on each type of loom is given. The time required to change
over from producing one fabric to another is negligible and does not have to be
considered.
Table 2: Loom Production Rates
Fabric Dobbie Rate
(yard per hour)
Regular Rate
(yard per hour)
1 4.63 *
2 4.63 *
3 5.23 5.23
4 5.23 5.23
5 4.17 4.17
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