A Company Is Developing a Linear Programming Model for Its

question 119

Multiple Choice

A company is developing a linear programming model for its aggregate production plan. Each worker can produce 500 units per quarter. If W_t = workforce size in period t and P_t = number of units produced in period t, then the production constraint for period 3 is

• A) W₃ = 500P₃.
• B) P₃ = W₃ - 500.
• C) P₃ = 500W₃.
• D) P₃ = W₃/500.

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Definitions:

Indirect Materials

Materials used in the production process but not directly traceable to a finished product, such as lubricants for machinery.

Spending Variance

The difference between the budgeted or planned amount of expense and the actual amount spent.

Standard Costing System

A cost accounting system that assigns expected costs to products to help managers monitor and control actual costs.

Direct Materials

Raw materials that can be directly traced to the production of a specific product.