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hi,
there is a difficulty related to the calculation of of limiting factor per unit in question given below
Data:
A company x makes three products A B C …..the cost structure for a batch of five of each is as follows
labor (at 250$ per hr) = 50$ 125 $ 62.5$ respectively A B C {this is limiting factor so providing only relevant data }
currently each day the company makes and sell max demand of A 400 units B 300 units C 600units.
REQUIREMENT> now the question ask the optimum production plan and profit that this gives if labor hrs available to 60 per day …….I have problem with the calculation of labor hours/loaf ….book answer is 4 10 5 respectively A B C how we calculate it ???It would seem that either you have mistyped the question or there is a typing error in your book.
Labour is being paid $12.50 per hour (not $250 – that would be an enormous rate of pay 🙂 )
So the time for A is 50/12.50 = 4 hours per unit; for B it is 125/12.50 = 10 hours per unit; and for C it is 62.5/12.5 = 5 hours per unit.
…that makes perfect sense.
it is indeed book error of mine ……thank a lot… have a nice day .
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