Optimal product mix


Assignment 12

1. Discuss use of Operation Research in development

2. Describe 2 methods how data required for a project that are not available can be estimated

3. Describe the use of LP in industrial production management



Three types of cutting tools are produced in a factory using a lathe, a grinder and a polisher. The duration in hours required to produce one batch of tools on each of these machines are given in the table 1 along with costs, selling prices of each batch of tools and the minimum number of hours available on each machine per week.

Table 1

Tool

type

Processing time (hrs.) per batch

Cost

(Rs.) per batch

Selling prices (Rs.) per batch

Lathe

Grinder

Polisher

A

7

2

5

100

145

B

3

3

8

65

100

C

4

4

2

80

120

per week

50

46

80





(i) Determine the optimum production schedule and maximum profit per week.

(ii) The factory wants to double the capacity of grinder at an additional cost of Rs. 50 per week. Should it go for it ? Substantiate your result.

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Operation Research: Optimal product mix
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