Question

Microbucks Computer Company makes two computers, the Pomegranate II and the Pomegranate Classic, at two different factories. The Pom II requires 2 processor chips, 16 memory chips, and 20 vacuum tubes, while the Pom Classic requires 1 processor chip, 4 memory chips, and 40 vacuum tubes. Microbucks has in stock at the beginning of the year 500 processor chips, 5,000 memory chips, and 10,000 vacuum tubes at the Pom II factory, and 150 processor chips, 2,000 memory chips, and 19,000 vacuum tubes at the Pom Classic factory. It manufactures 50 Pom IIS and 50 Pom Classics each month. Microbucks Computer Company, besides having the stock mentioned above, gets shipments of parts every month in the amounts of 100 processor chips, 1,000 memory chips, and 3,000 vacuum tubes at the Pom II factory, and 60 processor chips, 1,100 memory chips, and 2,000 vacuum tubes at the Pom Classic factory. (a) What will the company's inventory of parts be after 6 months? Processor chips | Memory chips | Vacuum tubes Pom II factory 500 Pom Classic factory (b) When (if ever) will the company run out of one of the parts? O The company will run out of parts in 6 months. O The company will run out of parts in 12 months. O The company will run out of parts in 18 months. The company will run out of parts in 24 months. O The company will never run out of parts.

Please help!!

Answer 1

1 Pom II Units to be made her month = 50 Requirements her month Processor Chipe 100 Memory Chips - 800 Vaccuum Tubes > 1000 1000 3000 + 200 + 2000 Purchases her month 100 Thus, net alfect on closing stock per month NIL Net effect on closing stock after 6monthe NIL Add Opening Store 500 Emcentory after months 600 +1200 + 12000 5ooo 10,000 6200 22000

Pom Classic Units to be made her month= 50 - Processor Chips Reg. her month S50 Purchase her month 60 Thus, net effect on els her month +10 Memory Ships 0 200 Hoo + 900 Vaccum Tubes 2000 2000 NIL Net effect on els after 6 months +60 Add Opening stock 150 Inventory after 6 months 210 + 5400 2000 7400 NIL 19000 19000

As we can see in part (a), the purchases per month of all the three items, namely Processor chips, Memory chips, Vacuum tubes exceeds the requirements of that item per month. In such a case, the closing inventory of each item for each month will always be higher than the opening inventory for the same month. Therefore, the company will never run out of parts.