2. Northface manufactures two types of sleeping bags: the Hyper Cat and the Infe

Question

2. Northface manufactures two types of sleeping bags: the Hyper Cat and the Inferno. Northface has contracted to supply a national discount retail chain with 30,000 Hyper Cats and 15,000 Infernos. However, Northface's production capability is limited in three departments: production, packaging and assembly. The following table summarizes the hours of processing time available and the processing time required by each department, for both types of sleeping bags Hours Required per Sleeping Bag Hyper Cat Inferno Hours Available Production Assembly Packaging 0.2 0.3 0.1 0.4 0.5 0.1 10000 15000 5000 Northface makes the Hypercat in house for $55 and it's Inferno for $85. Alternatively, it can have a third party make each of the sleeping bags for them. It costs Northface $67 and $95 to have the Hypercat and Inferno made for them, respectively. How many Hyper Cat and Inferno sleeping bags should Northface make and how many should it buy in order to fill its contract in the least costly manner? Formulate this LP model in Solver and solve. What is the optimal solution? How much would the Hypercat have to cost in order for Northface to consider purchasing them rather than making them? If the cost to make the Inferno increased to $90 per bag, how would the optimal solution change? How much should Northface be willing to pay to acquire additional capacity in the production area? Explain How much should Northface be willing to pay to acquire additional capacity in the assembly area? Explain a. b. c. d. e.

Explanation / Answer

Decision variable: (take any random value)

Objective Function

855000

Here the cost is calculated in the cell by multipying quantity with the given cost by both vendor

Given

Constraints:

On multiplying the time taken with the table mentioned above it, we will get

5000

On feeding these equations in solver ,we will get the solution which is

Quantity to be produced:

Northface Third party Hyper cat 10000 2000 Inferno 6000 9000

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