Wayland Company Manufacturers Two Models of Its Twin Size Futons

question 48

Multiple Choice

Wayland Company manufacturers two models of its twin size futons, standard and deluxe, in two locations, I and II. The maximum output at location I is 600/week, whereas the maximum output at location II is 400/week. The profit per futon for standard and deluxe models manufactured at Location I is $30 and $20 respectively; the profit per futon for standard and deluxe modelsmanufatured at Location II is $34 and $18, respectively. For a certain week, the company has recieved an order of 600 standard models and 300 deluxe models. If prior commitments dictate that the number of deluxe models manufactured at Location II not exceed the number of standard models manufactured there by more than 50. Find how many of each model should be manufactured at each location so as to satisfy the order and at the same time maximize the Wayland's profit. What is the maximum profit?

• A) 400 standard and 300 deluxe futons should be produced at location I and 400 standard and 0 deluxe futons should be produced at location II for a maximum profit of $25,600.
• B) 200 standard and 0 deluxe futons should be produced at location I and 400 standard and 300 deluxe futons should be produced at location II for a maximum profit of $25,600.
• C) 200 standard and 0 deluxe futons should be produced at location I and 40.0 standard and 300 deluxe futons should be produced at location II for a maximum profit of $25,600.
• D) 200 standard and 300 deluxe futons should be produced at location I and 400 standard and 0 deluxe futons should be produced at location II for a maximum profit of $25,600.
• E) 400 standard and 300 deluxe futons should be produced at location I and 200 standard and 0 deluxe futons should be produced at location II for a maximum profit of $25,600.

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Definitions:

Business Strategy

A plan of action designed to achieve a set of objectives that will ensure the long-term success and viability of a business.

Strategic Business Unit

A semi-autonomous division within a large company that focuses on a specific market or product line.

Strategy Formulation

The process of creating strategies to be implemented by an organization to achieve long-term goals.

Organizational Environment

The set of external and internal factors that influence an organization's operating situation, including regulatory, economic, social, and technological factors.