A Manager Is Applying the Transportation Model of Linear Programming

question 17

Multiple Choice

A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units and in period 2 demand is 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. If holding costs are $2 per unit each period, how many hours of regular employment should be used in period 1 (assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour) ?

• A) 100
• B) 125
• C) 150
• D) 50
• E) none of the above

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Definitions:

Managerial Accountants

Professionals who specialize in providing financial data and analysis to managers within organizations to facilitate informed business decisions.

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A document or data set that reviews and evaluates the performance of a project, department, or organization against planned objectives.

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Financial documents prepared for internal use by the management, providing insights into the business’s performance, costs, and operations.

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Generally Accepted Accounting Principles, a set of rules and guidelines provided by the Financial Accounting Standards Board (FASB) for accounting and reporting to ensure consistency and comparability among financial statements.