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A Product Mix Example

A Product Mix Example

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Published by: bulati on Jan 31, 2010
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08/16/2013

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1.A Product Mix Example
Quick-Screen is a clothing manufacturing company that specializes in producingcommemorative shirts immediately following major sporting events such as theWorld Series, Super Bowl, and Final Four. The company has been contracted toproduce a standard set of shirts for the winning team, either State University orTech, following a college football game on New Year’s Day. The item producedinclude two sweatshirts, one with silk-screen painting on the front and one withprint on both sides, and two T-shirts of the same configuration. The company hasto complete all production within 72 hours after the game, at which time a trailertruck will pick up the shirts. The company will work around the clock. The truck hasenough capacity to accommodate 1,200 standard size boxes. A standard size boxholds 12 T-shirts, and a box of 12 sweatshirts is three times of standard box. Thecompany has budgeted $25,000 for the production run. It has 500 dozen blanksweatshirts and T-shirts each in stock, ready for the production. The scenario isillustrated in Figure 4.1 bellow.The scenario requirements, unit costs, and profit per dozen for each type of shirtare shown in the following table:ProcessingCostProfitTime (hr)per Dozenper DozenSweatshirts Front0.10$36$90Sweatshirts Front/Back0.25$48$125T-shirts - Front0.08$25$45T-shirt Front/Back0.21$35$65The company wants to know how many dozen (boxes) of each type of shirt toproduce in order to maximize profit.Step1: Define the decision variablesHow many (dozens of) T-shirts and sweatshirts of each type to produce
 
Step 2: Define the objective functionMaximize profitStep 3: Define the constraintsThe resources available, including processing time, blank shirts, budget, andshipping capacity.
Decision Variables
This problems contains four decision variables, representing the number of dozens(boxes) of each type of shirts to produce.X
1
= sweatshirts, front printingX
2
= sweatshirts, front and back printingX
3
= T-shirts, front printingX
4
= T-shirts, front and back printing
The objective function
The company’s objective is to maximize profit. The total profit is the sum of theindividual profits gained from each type of shirt. The objective is expressed asMaximize Z = $90x
1
+ 125x
2
+ 45x
1
+ 65x
4
Model Constraints
The first constraint is for processing time. The total available processing time isthe 72-hour period between the end of the game and the truck pickup:0.10x
1
+ 0.25x
2
+ 0.08x
3
+ 0.21x
4
≤ 72 hrThe second constraint is for the available shipping capacity, which is 1,200standard-size boxes. A box of sweatshirts is three times the size of a standard-size box. Thus, each box of sweatshirts is equivalent in size to three boxes of T-shirts. This relative size differential is expressed in the following constraint:
 
3x
1
+ 3x
2
+ x
3
+ x
4
≤ 1,200 boxesThe third constraint is for the cost budget. The total budget available forproduction is $25,000:$36x
1
+ 48x
2
+ 25x
3
+ 35x
4
≤ 25,000The last two constraints reflect the available blank sweatshirts and T-shirts thecompany has in storage:x
1
+ x
2
≤ 500x
3
+ x
4
≤ 500
Model Summary
Maximize Z = $90x
1
+ 125x
2
+ 45x
1
+ 65x
4
Subject to0.10x
1
+ 0.25x
2
+ 0.08x
3
+ 0.21x
4
≤ 72 hr3x
1
+ 3x
2
+ x
3
+ x
4
≤ 1,200 boxes$36x
1
+ 48x
2
+ 25x
3
+ 35x
4
≤ 25,000x
1
+ x
2
≤ 500x
3
+ x
4
≤ 500x
1
+ x
2
+ x
3
+ x
4
≥ 0

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