Case Problem


[Page 176 ( continued )]

S PRING G ARDEN T OOLS

The Spring family has owned and operated a garden tool and implements manufacturing company since 1952. The company sells garden tools to distributors and also directly to hardware stores and home improvement discount chains. The Spring Company's four most popular small garden tools are a trowel, a hoe, a rake, and a shovel. Each of these tools is made from durable steel and has a wooden handle. The Spring family prides itself on its high-quality tools.

The manufacturing process encompasses two stages. The first stage includes two operationsstamping out the metal tool heads and drilling screw holes in them. The completed tool heads then flow to the second stage, which includes an assembly operation where the handles are attached to the tool heads, a finishing step, and packaging. The processing times per tool for each operation are provided in the following table:


[Page 177]
 

Tool (hr./unit)

 

Operation

Trowel

Hoe

Rake

Shovel

Total Hours Available per Month

Stamping

0.04

0.17

0.06

0.12

500

Drilling

0.05

0.14

0.14

400

Assembly

0.06

0.13

0.05

0.10

600

Finishing

0.05

0.21

0.02

0.10

550

Packaging

0.03

0.15

0.04

0.15

500


The steel the company uses is ordered from an iron and steel works in Japan. The company has 10,000 square feet of sheet steel available each month. The metal required for each tool and the monthly contracted production volume per tool are provided in the following table:

 

Sheet Metal (ft. 2 )

Monthly Contracted Sales

Trowel

1.2

1,800

Hoe

1.6

1,400

Rake

2.1

1,600

Shovel

2.4

1,800


The primary reasons the company has survived and prospered are its ability always to meet customer demand on time and its high quality. As a result, the Spring Company will produce on an overtime basis in order to meet its sales requirements, and it also has a long-standing arrangement with a local tool and die company to manufacture its tool heads. The Spring Company feels comfortable subcontracting the first-stage operations because it is easier to detect defects prior to assembly and finishing. For the same reason, the company will not subcontract for the entire tool because defects would be particularly hard to detect after the tool is finished and packaged. However, the company does have 100 hours of overtime available each month for each operation in both stages. The regular production and overtime costs per tool for both stages are provided in the following table:

 

Stage 1

Stage 2

 

Regular Cost

Overtime Cost

Regular Cost

Overtime Cost

Trowel

$ 6.00

$ 6.20

$3.00

$3.10

Hoe

10.00

10.70

5.00

5.40

Rake

8.00

8.50

4.00

4.30

Shovel

10.00

10.70

5.00

5.40


The cost of subcontracting in stage 1 adds 20% to the regular production cost.

The Spring Company wants to establish a production schedule for regular and overtime production in each stage and for the number of tool heads subcontracted, at the minimum cost. Formulate a linear programming model for this problem and solve the model using the computer. Which resources appear to be most critical in the production process?




Introduction to Management Science
Introduction to Management Science (10th Edition)
ISBN: 0136064361
EAN: 2147483647
Year: 2006
Pages: 358

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