Product Mix - Satchmo & Satchmo Electronics manufactures two products that can b

Question

Product Mix - Satchmo & Satchmo Electronics manufactures two products that can be produced on two different production lines.  Both products have their lowest production costs when produced on the more modern of the two production lines.  However, the modern production line does not have the capacity to handle the total demand.  As a result, some production will have to be routed to the older production line.  The following data show total production requirements, production line capacities, and production costs.

Production Cost/Unit Minimum Production

Product                  Modern Line                 Old Line                  Requirements

    A                              $3                                $5                           500 units

    B                            $2.50                            $4                          700 units

Production Capability 800                              600

Clearly define your decision variable and formulate a linear program model that cal be used to make the most economical production routing.

Explanation / Answer

scene one: produce 700 units of B on new production line and cost would be $ 1750

new line will produce 100 units of A and cost would be                                     $300

old line will produce 400 units of A and cost would be                                       $2000

hence total cost of production would be 1750+300+2000=$4050

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