case 6 individual analysis.docx - Vladimir Burnusuz May 5 2019 Case 6 Student Write Up Part 1 Within part 1 the optimal product mix is 20,000 units of

case 6 individual analysis.docx - Vladimir Burnusuz May 5...

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Vladimir Burnusuz May 5, 2019 Case 6 Student Write Up Part 1 Within part 1 the optimal product mix is 20,000 units of each, and the total revenue generated from each is $260,000 dollars. There are two constraints that are binding the amount of hours allocated for both advertising and technical support because all of the hours are used and there is no slack. There is 60,000 hours of slack for customer service. You would first need to increase the amount of money put into advertising. Part 2 Within part 2 the new optimal product mix is 11,111 units of AWS and 22,222 units of retail. There is less units of AWS and more units of retail and this makes total sense because the goal of running this linear programing is to maximize profit it takes a lot more hours of Customer service to produce AWS. The total revenue has decreased by 27,000 dollars and makes complete sense because within part 2 we has less customer service hours then we had in part 1.
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Unformatted text preview: Part 3 The new optimal product mix within part 3 was 25,000 units of AWS and 12,500 units of retail. The restraints that are now binding is the restraint that we must produce at least 25,000 units of AWS. The new total revenue figure is 225,000 dollars witch is the least amount of out of the three parts but I believe that the manager is ok with this change because Amazon believes that AWS is going to be the main revenue stream in the near future so although the total revenue went down they are investing in AWS now because it will cause an increase in sales of AWS in the future. You would have to change the per unit revenue of AWS a whole 7 dollars to have it be 12 dollars per-unit revenue for AWS to cause a change with the optimal product mix. No matter how much you increase the per-unit revenue for retail it will never change the optimal product mix because the current optimal product mix is already at the minimum...
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