A company produces two products: Product A and Product B. Each product must go t

Question

A company produces two products: Product A and Product B. Each product must go through two processes. Each Product A produced requires 2 hours in Process 1 and 5 hours in Process 2. Each Product B produced requires 6 hours in Process 1 and 3 hours in Process 2. There are 80 hours of capacity available each week in each process. Each unit of Product A produced generates $6.00 in profit for the company. Each unit of Product B produced generates $9.00 in profit for the company. If A = the number of units of Product A to produce each week and B = number of units of Product B to produce each week, then the capacity constraint for Process 1 would be

  A. 2A + 5B <= 80

  B. 2A + 6B >= 80

  C. 2A + 6B < 80

  D. 2A + 6B <=80

The expected monetary value criterion (EMV) is the decision-making approach used with the decision environment of:

  A. certainty

  B. risk

  C. uncertainty

  D. all of the above

  E. none of the above

Material requirements planning (MRP) is a useful inventory control and production planning system for all of the following except

  A. dependent demand items

  B. discrete demand items

  C. independent demand items

  D. job-shop production

Demand for components that does not have to be forecasted but is derived from the demand for the finished product is referred to as

  A. independent demand

  B. dependent demand

  C. statistical demand

  D. aggregate demand

Explanation / Answer

1. A = the number of units of Product A to produce each week and B = number of units of Product B to produce each week

Maximize Z= 6A+9B

subject to

2A+6B<=80

5A+3B<=80

A,B>=0

Hence, answer for first question is D

2. answer for Second question is D

Reason: EMV is obtained by multiplying the corresponding monetary value to their respective probabilities.

3. B

MRP is compatible with all the options except for demand items which are discrete in nature.

4. A

Demand which is generated off the finished product like computer, bicyle etc are called independent demand.

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