Tucker Inc. must produce 1,000 Tucker automobiles in the next quarter. The company has four production plants. The cost of producing a Tucker at each plant, along with the raw material and labor needed per automobile is shown in the table below.
|Plant||cost ($)||labor(hours)||raw material (units)|
The autoworkers' union requires that at least 400 cars be produced at Plant 3. In the next quarter, 3,300 hours of labor and 4,000 units of raw material are available for allocation to the four plants. Answer the following questions using the Excel model and output shown below. Consider the questions independently and explain your answers.
a) How many Tuckers should be produced at each plant? What is the cost associated with this production plan?
b) Would the answer to part (a) change if the production cost at Plant 4 was reduced by 50%? Explain why or why not.
c) What is the most Tucker should pay for an extra hour of labor?
d) What is the most Tucker should pay for an extra unit of raw material?
e) A new customer is willing to purchase 20 Tuckers at a price of $25,000 per automobile. Should Tucker fill this order (i.e., produce 1,020 Tuckers next quarter)?
Use excel sheet and sensitivity analysis to produce results.