Tots Toys Makes a Plastic Tricycle That Is Composed of Three

question 4

Essay

Tots Toys makes a plastic tricycle that is composed of three major components: a handlebar-front wheel-pedal assembly,a seat and frame unit,and rear wheels.The company has orders for 12,000 of these tricycles.Current schedules yield the following information. $$\begin{array} { l | c c c | c | c } \text { Component } & \begin{array} { c } \text { Requirements } \\\text { Plastic }\end{array} & \text { Time } & \text { Space } & \begin{array} { c } \text { Cost to } \\\text { Manufacture }\end{array} & \begin{array} { c } \text { Cost to } \\\text { Purchase }\end{array} \\\hline \text { Front } & 3 & 10 & 2 & 8 & 12 \\\text { Seat/Frame } & 4 & 6 & 2 & 6 & 9 \\\text { Rear wheel (each) } & 5 & 2 & .1 & 1 & 3 \\\quad \text { Available } & 50000 & 160000 & 30000 & &\end{array}$$ The company obviously does not have the resources available to manufacture everything needed for the completion of 12000 tricycles so has gathered purchase information for each component.Develop a linear programming model to tell the company how many of each component should be manufactured and how many should be purchased in order to provide 12000 fully completed tricycles at the minimum cost.

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Definitions:

Adjusting Entry

Journal entries made in accounting to update records for expenses and revenues not recorded during an accounting period.

Bad Debt Expense

The estimated amount of accounts receivable that a company does not expect to collect, recognized as an expense on the income statement.

Maturity Value

The amount to be paid to the holder of a financial instrument at its maturity date, including principal and any remaining interest.

Interest

The cost of borrowing money, typically expressed as a percentage of the sum borrowed, or the income earned from lending money.