The Weedwacker Company manufactures two types of lawn trimmers: an electric model and a gas model. The company has contracted to supply a national discount retail chain with a total of 30,000 electric trimmers and 15,000 gas trimmers. However, Weedwacker’s production capacity is limited in three departments: production, assembly, and packaging. The following table summarizes the hours of processing time available and the processing time required by each department, for both types of trimmers:
Hours Required per Trimmer
Electric Gas Hours Available
Production 0.20 0.40 10000
Assembly 0.30 0.50 15000
Packaging 0.10 0.10 5000
The company makes its electric trimmer in-house for $55 and its gas trimmer for $85. Alternatively, it can buy electric and gas trimmers from another source for $67 and $95, respectively. How many gas and electric trimmers should Weedwacker make, and how many should it buy in order to fulfill its contract in the least costly manner?
a. How much would electric trimmers have to cost for the company to consider purchasing these items rather than making them?
b. If the cost to make gas trimmers increased to $90 per unit, how would the optimal solution change?
c. How much should the company be willing to pay to acquire additional capacity in the assembly area? Explain.
d. How much should the company be willing to pay to acquire additional capacity in the production area? Explain.
e. Prepare a Spider Plot showing the sensitivity of the total cost to changes in costs to make and the costs to buy (adjusting the original values by of 90%, 92%, . . .,
110%). Which of these costs is the total cost most sensitive to?
f. Suppose the hours of production capacity available is uncertain and could vary from 9,500 to 10,500. How does the optimal solution change for every 100-hour change in production capacity within this range?
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