| Country : | Australia |
|---|
Assessment Task:
Linear Programming
Skechers sells a range of women and street shoes. The following presents hypothetical information inregards to the production of this line of products. The production manager would like your assistance to identify the optimal production mix. Below is an estimation of the costs to manufacture these products.
Each of the products goes through the same manufacturing process. The time for each process and the hours available are provided in the table below.
Required:
1. Using Excel Solver, formulate a linear program to determine the optimal production mix which ensures that the maximum contribution margin is obtained. How would your answer different if the objective was to maximise profit? Discuss the key features of your results and why there were considered to be the optimal result.
2. Discuss and suggest three possible ways in which the firm could improve its contribution margin in light of the above Solver analysis. Provide financial information to support your recommendations and clearly illustrate how your proposals impact the production mix and the firm and contribution margin.
Ensure that your answers for the above are discussed and supported by relevant calculations/workings.
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