CASE STUDY: Supply Chain of Innovative Company (A)

The Innovative Company has been developing four possible product lines. The total
manufacturing time available is 3,650 machine hours per month, and the total raw material
available is 4,850 kg per month. The company needs to decide the production quantities of these
product lines. A substantial fixed cost is associated with beginning of production for any
product. The following table gives relevant cost and revenue data:
PRODUCT
A B C D
Start –up (Fixed) Cost 350 750 500 400
Revenue per Unit 70 90 60 80
Manufacturing Hours 3 5 2 4
Required per unit
Raw Material (Kg) 6 2 7 5
Required per unit

Management’s objective is to find the most suitable product mix.

Develop an appropriate model for the above problem.