A Stereo Mail Order Center Has 9,000 Cubic Feet Available

question 99

Essay

A stereo mail order center has 9,000 cubic feet available for storage of its private label loudspeakers. The ZAR3 speakers cost $255 each and require 6 cubic feet of space; the ZAR2ax speakers cost $120 each and require 3 cubic feet of space; and the ZAR4 model costs $60 and requires 1 cubic foot of space. The demand for the ZAR3 is at most 30 units per month. The wholesaler has $100,000 to spend on loudspeakers this month. Each ZAR3 contributes $125, each ZAR2ax contributes $55, and each ZAR4 contributes $25. The objective is to maximize total contribution. Formulate this problem as a linear program.

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Definitions:

Manufacturing Overhead

Indirect production expenses including costs for factory equipment depreciation, quality control, and facility rent that are not directly linked to individual products.

Cost of Goods Manufactured

The total cost incurred to produce goods that are completed within a specific accounting period.

Schedule of Cost

A detailed report showing the total costs incurred for a specific project or production process over a set period.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, used as a measure in calculating labor costs and efficiency.