Memorandum To: Richard Merton, President, Merton Truck Company From: Khushdeep Kaur Date: October 22, 2013 ------------------------------------------------- RE: Merton truck company financial performance and product mix concerns Introduction: As requested an analysis was done to find out the most suitable product mix for Merton Truck Company in an effort to find out the combination that maximizes contribution and whether Truck 101 is really losing money or not. Analysis also aimed at finding
Words: 1500 - Pages: 6
(3500 to 4500) | 4000 | Metal stamp(5000 to 6500) | 6000 | Model 101(4000 to IE+30) | 5000 | Model 102(3000 to IE+30) | 4500 | | {If the current capacity moves outside the range, then the constraint's binding status will change} 5) No, Merton cannot continue to produce with the old optimal mix. They would now have to produce 1000 units of X1 and 1500 units of X2. This will be because of model 101 assembly now functioning only at 40% of its original capacity thus leading to loss of capacity
Words: 444 - Pages: 2
L&T MEP 5 Module: International Financial Management - I Faculty: Samir K Barua No. of Sessions: 12 (6 in April and 6 in May, 2014) Textbook: International Financial Management by Cheol S Eun and Bruce G Resnick (4th Edition) Cases: 1. MG Refining & Marketing, Inc. (A) 2. Westwood Plastics Inc. In addition, end of the chapter exercises would be used in the class to clarify and demonstrate use of the underlying concepts. Session 1&2 - Friday, April 11
Words: 279 - Pages: 2
In the summer of 1988, Merton Truck Company (“Merton”) was struggling with financial performance. A manufacturer of two specialized trucks (model 101 and model 102), Merton was conflicted with how to manage production and improve financial results. The executive team offered many different options to improve performance, but many were conflicted. For example, the sales manager suggested cancelling all production of model 101 trucks, whereas the controller suggested increasing model 101 production
Words: 982 - Pages: 4
MERTON TRUCK COMPANY Answer 1: Decision Variables: X1: Number of model 101 trucks to be produced X2: Number of model 102 trucks to be produced Objective: To maximise operational profit by optimally producing Model 101 and Model 102 trucks Maximise Z= 3000X1+5000X2 Subject to: X1+2X2<=4000 (Total machine hours available per month for engine assembly) 2X1+2X2<=6000 (Total machine hours available per month for Metal Stamping) 2X1<=5000 (Total machine hours available per month for Model 101
Words: 554 - Pages: 3
MERTON TRUCK COMPANY COST SPECIFICATIONS | MODEL 101 | MODEL 102 | Direct Materials | 24000 | 20000 | Direct Labour | Engine assembly | 1200 | 2400 | Metal Stamping | 800 | 600 | Final Assembly | 2000 | 1500 | Total Direct Labour | 4000 | 4500 | Overhead | Engine assembly | 2100 | 4000 | Metal Stamping | 2400 | 3000 | Final Assembly | 3500 | 2500 | Total Overhead | 8000 | 8500 | | Selling Price | 39000 | 38000 | Total Variable Cost | 36000 | 33000 | Contribution
Words: 622 - Pages: 3
Operations Research Assignment 1: Merton Truck Company Submitted to Professor Sumit Kumar By Sneh Chandel PGPX 2015-16 Roll No – 1503010 On 27/01/2015 Problem 1 1. (a) The best product mix can be found out by plotting out the corner points of graph obtained to maximize function p = 3000x + 5000y – 8600000 The above function was derived by subtracting cost price of ‘Truck model 101’ & ‘Truck Model 102’ from sales price of ‘Truck model 101’ & ‘Truck Model 102’. Sales price is
Words: 1574 - Pages: 7
Executive Summary The Problem: Merton Truck Company has been experiencing difficulties related to their financial performance, and they do not know which is the optimal product mix to maximize profits and performance. Group 2 was asked to make recommendations and analyze the given situation to eliminate the difficulties and come up with the right product mix and the optimal solutions considering different alternatives and scenarios. The Solution: Linear Programming was used to analyze the different
Words: 1741 - Pages: 7
1 Mathematical Programming The Mathematical Programming Add-in constructs models that can be solved using the Solver Add-in or one of the solution add-ins provided in the collection. When the Math Programming add-in is installed, several new command lines are added to the OR_MM menu. The menu items under the title Math Programming create models of the different types. Selecting an item from this list causes a dialog box to be presented which constructs a mathematical programming model. The models
Words: 12583 - Pages: 51
Merton Trucks Case Note Abstract We discuss Merton Trucks [Dhe90a] as a case to introduce linear programming in the MBA program. This case adapted from Sherman Motor Company case, was used to introduce Linear Programming formulations as well as duality. Refer to the teaching note [Dhe90b]. Our approach differs from the approach suggested by Dhebar [Dhe90b]. First, our audience consists pre-dominantly of engineers with not too much work experience. As a result, handling math and algebra is relatively
Words: 2007 - Pages: 9
