EPGP-05-130 Merton Truck Company Top Management of Merton Truck Company is planning to revisit the current product mix of the company involving two models of trucks M101 and M102 as the President of the company feels that M101 truck is not contributing to company’s profit. She also feels that purchasing engines from an outside supplier may be a good option as it eases the capacity problem in the engine assembly department. Manufacturing of the trucks are carried out in a three
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DXX I NDIAN I NSTITUTE A HMEDABAD OF M ANAGEMENT IIMA/QM-xxx 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
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2011-12 MERTON TRUCK COMPANY CASE SOLUTION HARSHID DESAI AMRUT MODY SCHOOL OF MANAGEMEMNT ROLL NO. 03 Merton Truck Company Calculating contribution for each truck‚ Contribution for model 101 = selling price (direct mat. + direct labour + variable o/h) = 39000 (24000 + 4000 + 8000) = Rs. 3000/Contribution for model 102 = selling price (direct mat. + direct labour + variable o/h) = 38000 (20000 + 4500 + 8500) = Rs. 5000/- Decisions variables: x1 = number of model 101 trucks produced‚
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MERTON TRUCKS COMPANY Keeping 3000$ and 5000$ as unit contributions respectively for Model 101 and Model 102 trucks‚ formulate the Merton’s product mix decision problem using LP. Present the LP problem in the standard form including all the details and units. Using solver‚ find the optimal product mix of these two trucks? What is the optimum total contribution that Merton can obtain? Tabulate‚ the optimality range for the decision variable coefficients and comment what will happen if the current
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MERTON TRUCK COMPANY Sol 1 : Given : Selling Price od Model 101 truck : 39000 Selling Price of Model 102 truck : 38000 We know‚ Contribution C = SP – VC VC for Model 101 : Direct Material + Direct Labor + Variable Overhead : 24000 + 4000 + 8000 = $36000 VC for Model 102: Direct Material + Direct Labor + Variable Overhead : 20000+ 4500+8500 = $33000 Let no of Model 101 produced be X Let no of Model 102 produced be Y Z= (39000-36000)X + (38000=33000)Y Z=3000X + 5000Y
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Case Analysis: Merton Truck Company Linear programming techniques can be used to not only determine the best production mix‚ but also to provide clues and data suggesting ways to improve profits. In 1988‚ Merton Truck Company was searching for ways to increase profits and ultimately its poor financial performance. Options being considered included changing their product mix by either removing or adding a product line‚ or renting capacity. In the following pages‚ the product mix and capacity
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MERTON TRUCK COMPANY 1) No. of Model 101= x‚ no. of model 102=y.Unit contribution/model= S.P – (Variable costs + Fixed cost).For Model 101‚ variable cost=36000 /unit‚For Model 102‚ variable cost=33000/unit.Fixed cost for both the model= 8600000 Therefore‚ total contribution z=39000x+38000y-36000x-33000y-8600000Z=3000x+5000y-8600000 The Constraints are:Engine assembly: x + 2y <= 4000Metal stamping: 2x + 2y <=6000Model 101 assembly: 2x <=5000Model 102 assembly: 3y <= 4500x‚y>=0.Solving
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CASE PROBLEM 3 : TRUCK LEASING STRATEGY From the information given‚ let X = number of trucks obtained from a short term lease in months Y = number of trucks obtained from the long term lease The monthly fuel costs are $100‚ and current trucks available are 20. Make the total monthly fuel costs of $2‚000. Length of lease | Cost per month ($) | 1 | 4‚000 | 2 | 3‚700 | 3 | 3‚225 | 4 | 3‚040 | The monthly costs for short term leased trucks are as follow‚ the calculation below include
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FROM LOCAL MARKET TO INTERNATIONAL FRONTIER Truck art is a flourishing masterpiece of Pakistani culture. It is about cultural history and tradition story telling and passion. Truck art has been present in Pakistan’s heritage for age . Today‚ this artistic media has reached it’s culmination point with it’s vibrant colours and craftmanship. As such every little adornment on a trucks has a special significance. As we know that our country is divided into different teritories so why not spread
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Customize your truck with fun truck accessories. Choose something to suit your personality. Whether it’s camo truck accessories‚ pink‚ animal print or something else‚ it’s easy to give your vehicle a unique look. We also stock wonderful accessories for the car as well. Wraps are an easy way to change the look of the outside of a vehicle. Camo truck wraps are decals that are often put around the entire outer bottom portion of the truck. The decals can be cut to size and used on other areas of the
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