Spring Garden Tools
Dear Mr. I.C. Spring,
The following report will provide information on the scheduling of garden tool production for the upcoming month at Spring Garden Tools. Exhibit 1 provides information regarding Lindo input and output based on a model that is designed to minimize the cost from the total production and subcontracting of garden tools, while satisfying the demand for each type of garden tool. All matters discussed in this report are based on this information. Using the cost minimization model in Exhibit 1 along with the constraints that were provided, the total minimum cost was found to be $85,472.60.
The following sections will discuss the specific production schedule, the ranges in which the results apply, and how results may change if constraints are modified.
Production Schedule, Ranges & Constraints
The following table provides information on how many units of each garden tool should be produced in regular production time, overtime, and through subcontracting.
Production Schedule Regular Stage 1 Overtime Stage 1 Subcontracting Stage 1 Total Stage 1 Regular Stage 2 Overtime Stage 2 Total Stage 2
Trowels 1692 108 0 1800 1800 0 1800
Hoes 1320 80 0 1400 1085 315 1400
Rakes 1600 0 0 1600 1600 0 1600
Shovels 933 0 867 1800 1462 338 1800
Total 5545 188 867 6600 5947 653 6600
(rounded to the nearest unit)
According to the “dual price” column in Exhibit 1, an additional hour of stamping time on each of the tools will decrease the total cost by $2.41 as the production facility will be able to cut down on overtime and subcontracting costs while increasing regular time costs by a smaller amount. This decrease in labor costs per hour is only relevant if the total hours of stamping are between 497.76 hours and 504.67 hours. Also, an additional hour of drilling time will decrease the total cost by $2.07.
One option that could potentially enable large savings would be to increase the amount of sheet metal that is available to the company by either
The following report will provide information on the scheduling of garden tool production for the upcoming month at Spring Garden Tools. Exhibit 1 provides information regarding Lindo input and output based on a model that is designed to minimize the cost from the total production and subcontracting of garden tools, while satisfying the demand for each type of garden tool. All matters discussed in this report are based on this information. Using the cost minimization model in Exhibit 1 along with the constraints that were provided, the total minimum cost was found to be $85,472.60.
The following sections will discuss the specific production schedule, the ranges in which the results apply, and how results may change if constraints are modified.
Production Schedule, Ranges & Constraints
The following table provides information on how many units of each garden tool should be produced in regular production time, overtime, and through subcontracting.
Production Schedule Regular Stage 1 Overtime Stage 1 Subcontracting Stage 1 Total Stage 1 Regular Stage 2 Overtime Stage 2 Total Stage 2
Trowels 1692 108 0 1800 1800 0 1800
Hoes 1320 80 0 1400 1085 315 1400
Rakes 1600 0 0 1600 1600 0 1600
Shovels 933 0 867 1800 1462 338 1800
Total 5545 188 867 6600 5947 653 6600
(rounded to the nearest unit)
According to the “dual price” column in Exhibit 1, an additional hour of stamping time on each of the tools will decrease the total cost by $2.41 as the production facility will be able to cut down on overtime and subcontracting costs while increasing regular time costs by a smaller amount. This decrease in labor costs per hour is only relevant if the total hours of stamping are between 497.76 hours and 504.67 hours. Also, an additional hour of drilling time will decrease the total cost by $2.07.
One option that could potentially enable large savings would be to increase the amount of sheet metal that is available to the company by either