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A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing, and the parameters of each process are as follows: Process 1 Production rate Daily production time Process 2 35 parts/hour 4 hours/day 20% 15 parts/hour 7 hours/day 9% Percent parts rejected Assume that the daily demand for hubs allows all defect-free hubs to be sold. Select the process that maximizes profit per day if each part is made from $4 worth of material and can be sold for $30. Both processes are fully automated, and variable overhead cost is charged at the rate of $40 per hour.

A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing, and the parameters of each process are as follows: Process 1 Production rate Daily production time Process 2 35 parts/hour 4 hours/day 20% 15 parts/hour 7 hours/day 9% Percent parts rejected Assume that the daily demand for hubs allows all defect-free hubs to be sold. Select the process that maximizes profit per day if each part is made from $4 worth of material and can be sold for $30. Both processes are fully automated, and variable overhead cost is charged at the rate of $40 per hour.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter10: Introduction To Simulation Modeling
Section: Chapter Questions
Problem 41P: At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 =...
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A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing, and the parameters of each process are as follows: Process 1 Production rate Daily production time Process 2 35 parts/hour 4 hours/day 20% 15 parts/hour 7 hours/day 9% Percent parts rejected Assume that the daily demand for hubs allows all defect-free hubs to be sold. Select the process that maximizes profit per day if each part is made from $4 worth of material and can be sold for $30. Both processes are fully automated, and variable overhead cost is charged at the rate of $40 per hour.
Transcribed Image Text:A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing, and the parameters of each process are as follows: Process 1 Production rate Daily production time Process 2 35 parts/hour 4 hours/day 20% 15 parts/hour 7 hours/day 9% Percent parts rejected Assume that the daily demand for hubs allows all defect-free hubs to be sold. Select the process that maximizes profit per day if each part is made from $4 worth of material and can be sold for $30. Both processes are fully automated, and variable overhead cost is charged at the rate of $40 per hour.
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