Toolco has contracted with AutoMate to supply their automotive discount stores with wrenches and chisels. AutoMate’s weekly demand consists of at least 1800 wrenches and 1300 chisels. (Toolco must supply at least these numbers of the two products.) Based on the current demand, Toolco must supply at least two times the number of chisels as wenches. So, for example, if Toolco supplies 500 wenches, then they need to supply at least 1000 chisels.
Toolco cannot produce all the requested units with its present capacity and must use overtime and possibly subcontract with other tool shops. The production cost per unit for each option along with the respective capacities is shown in the following table.
Tool
Production type
Capacity
Unit cost (Rs.)
Wrenches
Regular
Overtime
Subcontracting
500
300
5000
250
280
300
Chisels
Regular
Overtime
Subcontracting
620
300
5000
210
300
420
(Hint: Use variables: W, and C for the total number of wrenches and chisels supplied. In addition, use WR, WO, WS to find the regular, overtime, and subcontracted number of wrenches produced, and CR, CO, CS to find the regular, overtime, and subcontracted number of chisels produced.
part 1:: How many wrenches and chisels are to be produced in optimal production schedule?
Answer: .........................wrenches and ................. chisels
part 2:: what is the total production cost incurred by toollco ?
Answer: Rs .........................
part 3:: if the regular time production capacity of wrenches could be increased , at what rate per wrench should be willing to pay to increase the capacity?
Answer: Rs ......................... per increase in wrenches production
part 4:: up to what production capacity would toolco be willing to increase its regular time wrench production at this rate ?
Answer: ......................... wrenches production capacity.