A Company That Makes the Rocket Widget Has One Machine

question 41

Multiple Choice

A company that makes the rocket widget has one machine capable of producing this unique item. The machine requires an attendant, who works 40 hours a week for $12 per hour and has made himself available for a maximum of 8 hours of overtime. It costs $20 per hour to run the machine and it is capable of producing 10,000 rocket widgets per hour. It is possible to outsource some production, as long as the total output is limited to less than ten percent of total output. The widgets sell for $10 per hundred and cost $1 per hundred in materials. If the production manager wishes to develop a sales and operations plans using an optimization model, which of the following statements is valid?

• A)A constraint should limit the cost of materials to less than or equal to $1.
• B)A constraint should be to limit outsourced output to less than 10% of total output.
• C)The objective function must be to produce at least 10,000 rocket widgets per hour.
• D)A constraint should limit the cost to run the machine to less than or equal to $20 per hour.

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Definitions:

Durability

The ability of an item or material to withstand wear, pressure, or damage.

Transportability

The ease with which goods, services, or ideas can be moved or transmitted from one place to another.

Mood-Enhancing

Referring to anything that can positively alter one's emotional state or mood.

Informal Economy

A network of people producing and circulating marketable commodities, labor, and services that for various reasons escape government control.