Coffee Ltd AWhat Is the Objective Function Being Maximized?
B

question 12

Essay

Coffee Ltd.manufactures two different miniature models of furniture, a table and a chair. The company has 500 metres of lumber, 400 machine hours, and 600 direct labour hours available for production. The miniature tables and chairs provide £5 and £4 of contribution margin, respectively.
The time and lumber requirements to build a miniature table or chair are as follows: $\begin{array}{lll}&\text { Table } & \text { Chair } \\\text { Metres oflumber per unit } & 5 & 2 \\\text { Machine hours per unit } & 2 & 3 \\\text { Direct labour hours per unit } & 4 & 2\end{array}$
a.What is the objective function being maximized?
b.What are the constraint equations?
c.Graph the constraint equations. Identify the feasible region.
d.What is the optimal solution?

---

Definitions:

Net Working Capital

Net working capital is a measure of a company's liquidity, calculated as the difference between its current assets and current liabilities, indicating its short-term financial health.

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted to cash in the short term.

Depreciation

The process of allocating the cost of a tangible or physical asset over its useful life, representing wear and tear, deterioration, or obsolescence.

Operating Cash Flow

Operating cash flow refers to the cash generated from the normal operating activities of a business within a specific time period.