Weedwacker Company

The Weedwacker Company manufactures both gas and electric lawn trimmers. The company
has contracted to fulfill the demand of a national discount retail chain with a total of 30000
electric trimmers and 15000 gas trimmers during the next three months. However,
Weedwacker’s production capability is limited in three departments: production, assembly and
packaging. Table below summarizes the hours of processing time available and the processing
time required by each department, for both types of trimmers.

Hours/Trimmers Hours Available

Department Electric Gas
Production 0.4 0.6 10000
Assembly 0.3 0.5 15000
Packaging 0.1 0.1 5000

The company makes its electric trimmer in-house for $55 per unit and its gas trimmers for $85
per unit. Alternatively, Weedwacker can buy electric and gas trimmers from one of its suppliers
for $67 per unit and $95 per unit respectively. In order to maintain a good relationship with the
supplier, the company’s policy requires that at least 20% of the trimmers be purchased from
the supplier. The objective of Weedwackers is to fulfill its contracted demand in the least costly
manner.

1. What are the optimal production and purchasing plans for Weedwacker?
2. Are there multiple optimal solutions? Why or Why not?
3. Suppose that Weedwacker now has the option of hiring a part time worker so that the
time available for production can be increased by 30000 minutes (in the three-month
period), and the wage asked by the part time worker is $0.4/minute. Should the
company hire this worker? Why or Why not?
4. Suppose that the purchase prices (asked by the supplier) for the electric and gas
trimmers drop by 5% and 10%, respectively. What are the implications of the price
reduction on Weedwacker’s optimal cost?