Analysis For Business Decison Making - Report Example

Task a) The calculations for finding out contribution per unit are shown in Table For calculating contribution per unit, the variable cost per hour for each test device is multiplied by the number of hours required for testing each peripheral device on a particular test device. Firstly, the total labor cost per unit for each peripheral device can be calculated by adding up the variable labor cost per unit for each test device. After this, total cost is calculated by adding the variable labor cost and material cost. The difference of selling price per unit and total cost per unit gives contribution per unit for each peripheral device. Table 1: Contribution per Unit Calculations                 0.416667 Variable Labor cost Test Device 1 0.833333 1.25 2.083333 2.5 1.666667 3.333333 0.25 Test Device 2 0.25 1.25 0.75 0.5 1.25 1.25 0.3 Test Device 3 1.5 0.6 0.9 0.9 0.9 0.6 0.2 Test Device 4 0.6 0.8 0.4 0.2 0.4 0.6   Total Unit Variable labor cost   3.183333 3.9 4.133333 4.1 4.216667 5.783333   Contribution per unit   156.8167 156.1 250.8667 167.9 290.7833 274.2167 b) The linear programming model developed for the company is shown in Figure 1. The pink color shows the output variables and green color shows the decision variables. The non-bold part consists of input data. Figure 1: Linear Programming Model     Internal Modem External Modem Circuit Board CD Drive Hard Drive Memory Board Sum   Constraint Number of minutes on each test device Test Device 1 2 3 5 6 4 8 28 Read More