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Case Problem 2 Production Strategy

This document summarizes the optimal production strategy for two exercise machines, BodyPlus 100 and BodyPlus 200, given constraints on manufacturing resources. The optimal solution is to produce 50 BodyPlus 100 machines and 50/3 = 16.67 BodyPlus 200 machines, for a total profit of $26,233.33. Reducing the requirement that BodyPlus 200 production be at least 25% of total production would allow a slightly more profitable solution. However, management should not change this requirement if they want the BodyPlus 200 to help position the company as a leader in high-end equipment. Instead, they should try to obtain additional hours of machining and welding resources.

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261 views2 pages

Case Problem 2 Production Strategy

This document summarizes the optimal production strategy for two exercise machines, BodyPlus 100 and BodyPlus 200, given constraints on manufacturing resources. The optimal solution is to produce 50 BodyPlus 100 machines and 50/3 = 16.67 BodyPlus 200 machines, for a total profit of $26,233.33. Reducing the requirement that BodyPlus 200 production be at least 25% of total production would allow a slightly more profitable solution. However, management should not change this requirement if they want the BodyPlus 200 to help position the company as a leader in high-end equipment. Instead, they should try to obtain additional hours of machining and welding resources.

Uploaded by

Something Chic
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Case Problem 2: Production Strategy

1. Let BP100 = the number of BodyPlus 100 machines produced BP200 = the number of BodyPlus
200 machines produced

Max 371BP100 + 461BP200


s.t.
8BP100 + 12BP200 ≤ 600 Machining and Welding
5BP100 + 10BP200 ≤ 450 Painting and Finishing
2BP100 + 2BP200 ≤ 140 Assembly, Test, and Packaging
-0.25BP100 + 0.75BP200 ≥ 0 BodyPlus 200 Requirement

BP100, BP200 ≥ 0

Solutions to Case Problems

BP200
80
.

70
Number of BodyPlus 200

Assembly, Test, and Packaging


60

50 Machining and Welding


40
BodyPlus 200 Requirement
30

20

10 Painting and Finishing


Optimal Solution
BP100
0 10 20 30 40 50 60 70 80 90 100
Number of BodyPlus 100

Optimal solution: BP100 = 50, BP200 = 50/3, profit = $26,233.33. Note: If the optimal solution is
rounded to BP100 = 50, BP200 = 16.67, the value of the optimal solution will differ from the value
shown. The value we show for the optimal solution is the same as the value that will be obtained if
the problem is solved using a linear programming software package such as The Management
Scientist.

2. In the short run the requirement reduces profits. For instance, if the requirement were reduced to at
least 24% of total production, the new optimal solution is BP100 = 1425/28, BP200 = 225/14,
with a total profit of $26,290.18; thus, total profits would increase by $56.85. Note: If the optimal
solution is rounded to BP100 = 50.89, BP200 = 16.07, the value of the optimal solution will differ
from the value shown. The value we show for the optimal solution is the same as the value that will
be obtained if the problem is solved using a linear programming software package such as The
Management Scientist.

3. If management really believes that the BodyPlus 200 can help position BFI as one of the leader's in
high-end exercise equipment, the constraint requiring that the number of units of the BodyPlus 200
produced be at least 25% of total production should not be changed. Since the optimal solution uses
all of the available machining and welding time, management should try to obtain additional hours
of this resource.

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