Franklin Furniture

Franklin Furniture
Franklin Furniture produces tables and chairs at its East-side plant for use in university
classrooms. The unit profit for tables is $70, while that for chairs is $30.
Tables and chairs are manufactured using finished pressed wood and polished aluminum
fittings. Including scrap, each table uses 20 square feet of pressed wood, whereas each chair
uses 12.5 square feet of the pressed wood. Franklin Furniture has 6000 square feet of the
pressed weed available for the East-side plant weekly. The aluminum fittings that reinforce the
legs of both the tables and chairs are purchased from an outside supplier. Franklin Furniture
can purchase up to 400 boxes of fittings weekly; one box is required for each table or chair
manufactured.
Production time is 72 minutes (1.2 hours) per table and 18 minutes (0.3 hours) per chair.
Franklin Furniture has eight employees, each of whom works an average of 7.5 hours per day.
Thus, in an average five-day work week, the company has available 8(7.5)(5) = 300 production
hours.
Franklin Furniture also produces desks and computer workstations at its West-side plant.
Each desk nets the company a profit of $100, while each computer workstation nets $125. These
products are also produced from finished pressed wood and aluminum. The amount of each, as
well as the labor time needed to produce a desk or computer workstation, is given in the
following table.
Pressed Wood Aluminum Fittings Labor
Desk 20 sq. ft. 1 box 1.5 hours
Workstations 30 sq. ft. 1 box 2.0 hours
Available 6000 sq. ft. 400 boxes 300 hours
Franklin Furniture is considering combining operations of both plants into a single plant.
This consolidation will combine the weekly available resources so that 12,000 square feet of
pressed wood, 800 boxes of aluminum fittings, and 600 production hours will available weekly.
However, the accounting department estimates the cost of renovating the plant will be $5000
per week, on an amortized basis.
In your role of a Business Consultant to Franklin Furniture, prepare a business report for
Franklin Furniture giving optimal weekly production schedules for each of its plants operating
separately. Then include an analysis and recommendation to Franklin Furniture for combining
operations at both plants into a single plant.
(Hint: This case can be solved by splitting it into three small cases, two of which can be analyzed
using only two decision variables.)
Source: Lawrence, J., and Pasternack, B., Applied Management Science, 2nd Edition Wiley, 2005.