Example 1 Better Fitness, Incorporation. (BFI), produces exercise equipment at its plant in Freeport, Li. It just lately designed two universal pounds machines for the home exercise marketplace. Both devices use BFI-patented technology that provides the user with an extremely a comprehensive portfolio of motion capability for each sort of exercise performed. Until now, these kinds of capabilities have been available only on costly weight equipment used generally by physical therapists. In a recent transact show, presentations of the equipment resulted in significant dealer interest.
In fact , the number of orders that BFI received at the trade display far surpass its manufacturing capabilities for the current creation period. Therefore, management chosen to begin production of the two machines. Both the machines, which usually BFI named the BodyPlus 100 as well as the BodyPlus 200, require several amounts of methods to produce. The BodyPlus 75 consists of a frame unit, a press station, and a pec-dec train station. Each shape produced uses 4 hours of machining and welding some 2 hours of painting and finishing period.
Each press station requires 2 hours of machining and welding some 1 hour of painting and finishing period, and each pec-dec station uses 2 hours of machining and welding some 2 hours of painting and finishing period. In addition , 2 hours are put in assembling, tests, and packaging each BodyPlus 100. The raw material costs happen to be $450 for each and every frame, 300 dollar for each press station, and $250 for each and every pec-dec stop; packaging costs are estimated to be 50 dollars per unit. The BodyPlus 200 includes a frame product, a press station, a pec-dec train station, and a legpress station.
Each body produced uses 5 hours of engineering and welded time and four hours of piece of art and finishing time. Every single press place requires 3 hours engineering and welding time and 2 hours of piece of art and finishing time, every single pec-dec train station uses two hours of machining and welded time and two hours of piece of art and concluding time, and each legpress place requires two hours of machining and welded time and two hours of art work and concluding time. Additionally , 2 hours are spent putting together, testing, and packaging every single Body-Plus two hundred.
The raw material costs are $650 for each shape, $400 for every single press place, $250 for each and every pec-dec station, and two-hundred dollar for each leg-press station; the labels costs are estimated being $75 every unit. For production period, management estimations that six-hundred hours of machining and welding period, 450 several hours of piece of art and polishing off time, and 140 hours of set up, testing, and packaging time will be available. Current labor costs are $20 per hour pertaining to machining and welding period, $15 per hour for portrait and concluding time, and $12 hourly for set up, testing, and packaging period.
The market in which the two devices must compete suggests a retail price of $2400 for the BodyPlus 95 and $3500 for the BodyPlus 2 hundred, although some overall flexibility may be accessible to BFI as a result of unique capacities of the fresh machines. Authorized BFI dealers can purchase devices for 70 percent of the advised retail selling price. BFI’s director believes the unique capacities of the BodyPlus 200 can assist position BFI as one of the market leaders in high-end exercise equipment. As a result, he provides stated that the number of products of the BodyPlus 200 produced must be at least 25% of the total production.
Bureaucratic Report Evaluate the production trouble at Better Fitness, Incorporation., and prepare a report to get BFI’s president presenting the findings and recommendations. Contain (but tend not to limit your discussion to) a consideration in the following things: 1 . Precisely what is the advised number of BodyPlus 100 and BodyPlus two hundred machines to generate? 2 . How exactly does the requirement the fact that number of models of the BodyPlus 200 produced be for least 25% of the total production impact profits? 3. Where ought to efforts become expended in order to increase profits? Include a duplicate of your thready programming version and graphical solution within an appendix on your report.
Example 2 Hart Venture Capital (HVC) specializes in providing venture capital intended for software expansion and Internet applications. Currently HVC has two purchase opportunities: (1) Security Systems, a good that needs additional capital to develop an Internet protection software package, and (2) Market Analysis, a market research firm that needs extra capital to build up a software deal for performing customer satisfaction surveys.
In exchange pertaining to Security Systems inventory, the company has asked HVC to provide $600, 1000 in yr 1, $600, 000 in year two, and $250, 000 in year several over the approaching three-year period. In exchange because of their stock, Marketplace Analysis provides asked HVC to provide 500 usd, 000 in year 1, $350, 500 in season 2, and $400, 000 in yr 3 in the same three-year period. HVC believes that both investment opportunities will be worth seeking. However , due to other investments, they are willing to commit at most of the $800, 500 for equally projects inside the first 12 months, at most $700, 000 in the second year, and 500 usd, 000 inside the third year.
HVC’s monetary analysis crew reviewed equally projects and recommended the fact that company’s goal should be to take full advantage of the net present value from the total expense in Burglar alarms and Market Analysis. The net present benefit takes into account the estimated value of the stock at the end in the three-year period as well as the capital outflows that are necessary during each of the three years. Using an 8% price of return, HVC’s monetary analysis crew estimates that 100% funding of the Burglar alarms project includes a net present value of $1, 800, 000, and 100% financing of the Industry Analysis project has a net present benefit of $1, 600, 1000.
HVC provides the option to fund any percentage of the Security Systems and Industry Analysis projects. For example , if HVC decides to fund 40% of the Burglar alarms project, investments of zero. 40($600, 000) _ $240, 000 would be required in year 1, 0. 40($600, 000) _ $240, 000 would be required in yr 2, and 0. 40($250, 000) _ $100, 000 would be needed in 12 months 3. In this instance, the net present value from the Security Systems project would be zero. 40($1, 800, 000) _ $720, 500. The expenditure amounts and the net present value to get partial funding of the Marketplace Analysis task would be calculated in the same manner.
Bureaucratic Report Perform an evaluation of HVC’s investment issue and make a report that presents your findings and recommendations. Include (but tend not to limit the discussion to) a consideration in the following items: 1 . What is the advised percentage of every project that HVC will need to fund and the net present value in the total expense? 2 . What capital allowance plan for Security alarm systems and Industry Analysis for the coming three-year period plus the total HVC investment annually would you suggest?. What result, if any kind of, would HVC’s willingness to commit an additional $100, 000 during the first year possess on the suggested percentage of each project that HVC should fund? some. What could the capital portion plan look like if an added $100, 1000 is made offered? 5. What is the recommendation as to whether HVC will need to commit the extra $100, 500 in the 1st year? Present model information Case study several Digital Imaging (DI) produces photo printers for both the professional and buyer markets.
The DI customer division just lately introduced two photo printers that provide color prints rivaling those manufactured by a professional digesting lab. The DI-910 unit can produce a 4³ _ 6³ borderless print out in approximately 37 seconds. The more sophisticated and faster DI-950 can even produce a 13³ _ 19³ borderless produce. Financial predictions show earnings contributions of $42 for every single DI-910 and $87 for every single DI-950. The printers will be assembled, examined, and grouped together at DI’s plant located in New Bern, North Carolina. This plant is highly automated and uses two manufacturing lines to produce the printers.
Range 1 works the assembly operation with times during the 3 minutes per DI-910 printer and six minutes every DI-950 printer. Line two performs the testing and packaging operations. Times are 4 minutes per DI-910 printer and 2 minutes per DI-950 printer. The shorter coming back the DI-950 printer is because of its faster print acceleration. Both developing lines happen to be in operation one particular 8-hour change per day. Managerial Report Perform an examination for Digital Imaging in order to determine how various units of each and every printer to make. Prepare a are accountable to DI’s leader presenting the findings and recommendations.
Include (but will not limit your discussion to) a consideration of the following: 1 ) The suggested number of devices of each printing device to produce to maximize the total contribution to revenue for a great 8-hour change. What reasons might management have because of not implementing your recommendation? 2 . Suppose that management also claims that the volume of DI-910 printers produced has to be at least as superb as the quantity of DI-950 models produced. Let’s assume that the objective is to maximize the overall contribution to profit to get an 8-hour shift, how many products of each printing device should be developed?
3. Does the solution you developed partly (2) harmony the total period spent on collection 1 and the total time spent on series 2? How come might this balance or lack of that be a concern to managing? 4. Management requested a great expansion from the model simply (2) that would provide a better balance involving the total period on line one particular and the total time on the web 2 . Management wants to limit the difference between your total period on line 1 and the total time online 2 to 30 minutes or less. If the objective remains to maximize the entire contribution to profit, how many products of each computer printer should be produced?
What effect does this work load balancing include on total profit in part (2)? five. Suppose that simply (1) management specified the purpose of maximizing the overall number of ink jet printers produced every shift instead of total earnings contribution. With this target, how many units of each and every printer needs to be produced every shift? What effect performs this objective have got on total profit and workload managing? For each answer that you develop, include a backup of your linear programming style and graphical solution in the appendix to your report.
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