Question: Frandec Company manufactures, assembles and rebuilds material handling equipment used in warehouses and distribution centers.  One product, called a Liftmaster, is assembled from four components: a frame, a  motor, two supports, and a metal strap.  Frandec’s production schedule calls for 5000 Liftmasters to be made next month.  Frandec purchases the motors from an outside supplier, but the frames, supports, and straps may wither be manufactured by the company or purchased from an outside supplier.  Manufacturing and purchase costs per unit are shown.

Component                        Manufacturing Cost                        Purchase Cost

Frame                                   $38.00                                                   $51.00

Support                                $11.50                                                   $15.00

Strap                                     $6.50                                                     $7.50

Three departments are involved in the production of these components.  The time (in minutes per unit) required to process each component in each department and the available capacity (in hours) for the three departments are as follows:

Component                        Cutting Milling                                 Shaping

Frame                                   3.5 2.2                                          3.1

Support                                1.3 1.7                                          2.6

Strap                                     0.8                      ---                                           1.7

Capacity (hours)               350 420                                         680

Formulate and solve a linear programming model for this make or buy application.  How many of each component should be manufactured and how many should be purchased?

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document