Quitmeyer Electronics Incorporated manufactures the following six microcomputer peripheral devices: internal modems, external modems, graphics circuit boards, CD drives, hard disk drivers, and memory expansion boards. Each of these technical products requires time, in minutes, on three types of electronic testing equipment, as shown in the table shown below.
The first two test devices are available 120 hours per week. The third (device 3) requires more preventive maintenance and may be used only 100 hours each week. The market for all six computer components is vast, and Quitmeyer Electronics believes that it can sell as many units of each products as it can manufacture. The table that follows summarizes the revenues and material costs for each product:
Device Revenue per unit sold($) Material Cost per unit($)
Internal Modem 200 35
External Modem 120 25
Graphics Circuit Board 180 40
CD drive 130 45
Hard disk drive 430 170
Memory expansion board 260 60
In addition, variable labor costs are $15 per hr for test device 1, $12 per hour for test device 2 and $18 per hour for test device 3.
IM EM GCB CD HDD MEB
7 3 12 6 18 17 TIME FOR TEST 1
2 5 3 2 15 17 TIME FOR TEST 2
5 1 3 2 9 2 TIME FOR TEST 3
a. formulate this problem as an LP model
b. solve the problem using the computer what is the best product mix
c. what is the value of an additional minute of time per week on test device 1? Test devide 2? Test device 3? Should the corporation add more test device time? If so on which equipment?