Use the Table Below to Answer the Following Questions) Answer the Following Questions Using a Linear Optimization Model

question 20

Multiple Choice

Use the table below to answer the following questions) .
Remington Textiles has a mill that produces three types of fabrics on a make-to-order basis. The mill operates on a 24/7 basis. The key decision facing the plant manager is about the type of loom needed to process each fabric during the coming 12 weeks to meet demands for the three fabrics and not exceed the capacity of the looms in the mill. Two types of looms are used: Jaquard and Northrop. Jaquard looms can be used to make all fabrics and are the only looms that can weave certain fabrics, such as plaids. Demands, variable costs for each fabric, and production rates on the looms are given in the table below. The mill has 10 Northrop looms and 2 Jaquard looms. Any fabrics that cannot be woven in the mill because of limited capacity will be purchased from an external supplier, finished at the mill, and sold at the selling price. In addition to determining which looms to use to process the fabrics, the manager also needs to determine which fabrics to buy externally. $\begin{array}{|l|l|l|l|l|l|}\hline\text { Remington } & & & \\\text { Textiles } & & & \\\hline & & & &\\\hline \text { Data }\\\hline \text { Fabric } & \text { Demand } & \text { Jaquard } & \text { Northrop } \\&&\text { Capacity } & \text { Capacity } & \text { Mill Cost } & \text { Outsourcing } \\&\text { yards) } & \text { yards/hour) } & \text { yards/hour) } & \text { \$/yard) } & \text { Cost \$/yard) }\\\hline 1 & 50,000 & 5.6 & 0 & 0.53 & 0.81 \\\hline 2 & 62,000 & 5.2 & 4.8 & 0.6 & 0.85 \\\hline 3 & 35,000 & 4.8 & 4.5 & 0.71 & 0.84 \\\hline\end{array}$ Answer the following questions using a linear optimization model.
-According to the model, what is the total amount of Fabric 3 to be produced with Northrop?

• A) 0
• B) 35,000
• C) 2,405
• D) 32,595

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Definitions:

Average Total Costs

The total costs of production (fixed plus variable costs) divided by the total quantity of output produced, indicating the average cost per unit of product.

Perfect Competitor

A hypothetical firm in a market structure characterized by many sellers, selling homogeneous products, and having no control over the market price.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for the adjustment to changes in market conditions or demand.

Output

The total amount of goods and services produced by an economic system or by a single firm within a certain period.