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Case For Midterm

SureFit Inc. designed two new home weight machines, WL30 and WL31, using patented technology for a wide range of motion. At a trade show, SureFit received overwhelming orders for the machines exceeding production capacity. SureFit decided to produce the machines, which require raw materials and resources. The WL30 has three stations while the WL31 has four stations. Production information like material costs, labor times and costs, available production resources, and retail prices are provided to help SureFit determine how many of each machine can be produced.

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Samridhi Chaurasia
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95 views1 page

Case For Midterm

SureFit Inc. designed two new home weight machines, WL30 and WL31, using patented technology for a wide range of motion. At a trade show, SureFit received overwhelming orders for the machines exceeding production capacity. SureFit decided to produce the machines, which require raw materials and resources. The WL30 has three stations while the WL31 has four stations. Production information like material costs, labor times and costs, available production resources, and retail prices are provided to help SureFit determine how many of each machine can be produced.

Uploaded by

Samridhi Chaurasia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Read the following case and answer the questions given in the end.

SureFit Inc. (SFI) is a leading manufacturer of cardiovascular exercise equipment in the USA. Recently,
the company has designed two new weight machines suitable for a workout at home, named WL30 and
WL31. The newly designed machines are special from the point of view of the technology used. They used
FI-patented technology that offers the opportunity of using a wide range of motion capabilities for the users.
So far, these features are only available on costly weight machines primarily used by physiotherapists.

Traditionally, newly designed machines are demonstrated in trade shows organized in various cities. In the
trade show organized in Baltimore in the last month, SureFit Inc. has received an overwhelming number of
orders. The number of orders received is more than the production capacity of the ongoing production cycle.
Thereafter, the company decided to produce the two machines. Raw materials and other resources are
obvious requirements for both machines.

The WL30 model has a frame unit, pec-dec station, and a press station. On the other hand, The WL31 model
has a frame unit, pec-dec station, a press station, and a leg press station. For each unit of WL30, the raw
material costs are $400 for each frame, $350 for each press station, and $300 for each pec-dec station, and
the packaging cost is $100. For each unit of WL31, the raw material costs are $600 for each frame, $500
for each press station, $200 for each pec-dec station, $200 for each leg press station, and the packaging cost
is $150. The requirement of machining and welding time per produced frame of WL30 is four hours, and
painting and finishing time is two hours. The requirement of machining and welding time per produced
frame of WL31 is five hours, and painting and finishing time is four hours. Each pec-dec station of WL30
requires two hours of machining and welding time and two hours of painting and finishing time. Each pec-
dec station of WL31 also uses exactly the same machining and welding time, and painting and finishing
time. Each press station of WL30 requires two hours of machining and welding time and one hour of
painting and finishing time. Each press station of WL31 requires three hours of machining and welding
time and two hours of painting and finishing time. Also, each leg press station of WL31 requires two hours
of machining and welding time and two hours of painting and finishing time. Additionally, both WL30 and
WL31 models require two hours each of assembling, testing, and packaging time.

The management of SureFit Inc. is aware of its resources for the coming production period. The availability
of machining and welding time is 600 hours, painting and finishing time is 500 hours, and assembly, testing,
and packaging time is 150 hours. Per-hour labor costs for machining and welding time is $20, painting and
finishing time is $15, and assembly, testing, and packaging time is $12. The retail prices of WL30 and
WL31 models are $2500, and $3000, respectively. However, the company decided to provide the machines
for 80% of the suggested retail price to authorized SFI dealers.

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