Paper Topic:
Week4 Assignment
Q1 . What is the optimal production plan for the year if we assume no promotions ? What is the annual profit from this plan ? What is the cost of this plan Answers The company has a given number of employees i .e . 250 who are supposed to work for 8 hours daily and can work overtime for at most 20 hours in any given month . With the company opting not to use promotion as a way of increasing the demand , for it to achieve optimal or maximum production all the factors of production
must be put in place . This means making full use of the employees allocated normal time and the stipulated overtime (Lee W .J , and Kim D , 1993
The calculations are as follows :-
Normal shift
Each employee works 8 hours a day for 20 days in a month
Each sink takes 2 hours of labor time and thus
2 hours 1 sink (8 x1 ) ch 2 4 units
8 hours
4 sinks x 20 days x 250 employees x 12 months 240 ,000 units
With overtime
20 hours per employee per month
2 hours 1 sink (20 x 1 ) ch 2 10 units
20 hours
10 units x 250 employees x 12 months 30 ,000 units Annual profit Sales - Cost of production
Sales 125 x 270 ,000 33 ,750 ,000
Cost of production labor material cost storage cost
Labor (Normal shift ) 250 x 8 x 20 x 12 x...
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