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

question 32

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.
-From the Sensitivity Report, which of the following would reduce the total cost by $1.568 for each additional hour of capacity for the Jaquard looms?

• A) decreasing the Northrop loom cost per hour by $0.58
• B) decreasing the Northrop loom capacity down by 534.4
• C) increasing the Jaquard loom capacity up by 4896.5 hours
• D) increasing the Jaquard loom capacity up by 4032 hours

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Definitions:

Fair Value

Fair Value is the estimated market price of an asset or liability, reflecting what a willing buyer would pay a willing seller in an arm's length transaction.

Nonmonetary Productive Assets

Physical or tangible assets that do not have a fixed monetary value but contribute to the production capacity of a business.

Boot

Additional cash or property added to an exchange or trade to make the value of the traded goods equal, commonly used in real estate and barter transactions.

Gain

An increase in wealth or resources, often resulting from a favorable difference between the purchase price and the selling price of assets.