A Manager Is Applying the Transportation Model of Linear Programming

question 37

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) 175

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Definitions:

Support Activities

Business activities that do not add value directly to a firm’s product or service under consideration but support the primary activities that do add value.

Add Value

To add value means to enhance or increase the worth of a product or service through additional features, improved quality, or enhancement of some form.

Differentiation

The process of making a product, service, or business model stand out from competitors, often through unique features, quality, or branding.

Innovation

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.