Larkin Industries Manufactures Several Lines of Decorative and Functional Metal

question 24

Essay

Larkin Industries manufactures several lines of decorative and functional metal items.The most recent order was for 1200 door lock units for an apartment complex developer.The sales and production departments must work together to determine delivery schedules.Each lock unit consists of three components: the knob and face plate,the actual lock itself,and a set of two keys.Although the processes used in the manufacture of the three components vary,there are three areas where the production manager is concerned about the availability of resources.These three areas,their usage by the three components,and their availability are detailed in the table below. ​
A quick look at the amounts available confirms that Larkin does not have the resources to fill this contract.A subcontractor,who can make an unlimited number of each of the three components,quotes the prices below. ​
Develop a linear programming model that would tell Larkin how to fill the order for 1200 lock sets at the minimum cost.

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Definitions:

Accounts Receivable

Receivables by a corporation from its clients for goods or services that have been extended or utilized, yet the corresponding payments are awaited.

Common-base Year Statement

Financial statements that are adjusted to a single point in time or base year, facilitating comparison across different time periods.

Market-to-Book Ratio

A ratio used to compare a company's current market price to its book value.

Depreciation Life

The estimated period over which a fixed asset is expected to be usable, affecting its depreciation calculation for accounting purposes.