HW #3 (with q.2) - Michael Weekley Operations Management...

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Michael Weekley Operations Management Homework #3 1-8-07 Problem 1. 1) 1200 Hummer Tires 200 Colt Tires 2) $400,000 3) They shouldn’t hire anymore specialist’s because Area C is only utilized for 100 hours per week. In fact, the company could lose 3 of the 5 Area C Specialists and still maintain the optimal demand. 4) The Mix did change in favor of Dayton’s profits. The maximized profit is $418,983. The plant would produce 1271 complete Hummer tires and 152 complete Colt tires per week. 5) Assuming that the company made the changes to their system and increased costs and prices, with the new production figures the profit will improve to $418,687.50 per week which is an increase of $18,687.50 per week from the original $400,000. 6) Once again, they have no need for more Area C specialists. The Area C hours necessary are 77 per week, which means that the company wouldn’t even fully utilize 2 specialists each week, and they could lay off 3/5 of their specialist team.
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