Explore BrainMass

Explore BrainMass

    Local Steel Construction Company produces two products, stee

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Local Steel Construction Company produces two products, steel and wood beams. Steel beams have a unit contribution margin of $200, and wood beams have a unit contribution margin of $150. The demand for steel beams exceeds Local Steel Construction Company's production capacity, which is limited by available direct labor and machine-hours. The maximum demand for wood beams is 90 per week. Management desires that the product mix should maximize the weekly contribution toward fixed costs and profits.

    Direct manufacturing labor is limited to 3,000 hours a week and 1,000 hours is all that the company's outdated machines can run a week. The steel beams require 120 hours of labor and 60 machine-hours. Wood beams require 150 labor hours and 120 machine-hours.

    Formulate the objective function and constraints necessary to determine the optimal product mix.

    © BrainMass Inc. brainmass.com March 4, 2021, 10:46 pm ad1c9bdddf

    Solution Preview

    Please see attached file thanks.

    Let S denotes steel beams and W denotes wood beams.
    The unit contribution margin is the marginal profit per unit sale (see reference). Because ...

    Solution Summary

    The solution provides detailed reasoning, explanations and mathematical formula for the problem.