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Jamestown Furniture Co. is a small, but fast-growing manufacturer of living room furniture. Its two principal products are end tables and sofas. There are five processes in the manufacturing at Jamestown: Cutting the lumber, cutting the fabric, sanding, staining, and assembly. Jamestown has one employee working in fabric cutting and one employee working in staining. These are relatively skilled workers and could be replaced only with some difficulty.
The cutting and sanding operations are performed by two workers each, and while there is some skill to these operations, it is less critical than for staining and for fabric cutting. Assembly is the least skill-based process and is currently done by one full-time employee and a group of part timers who provide a total of 175 minutes of working time per week. The other employees work a 40-hour week, with 5 hours off for breaks, training, and personal time. Assume a four-week month, and that by prior agreement, any of the employees can be switched from one task to another.
The current demand for Jamestown’s products and sales prices are provided below. Jamestown expects demand to increase significantly in the coming months (this depends on whether it is able to successfully obtain the order it is negotiating to get from a motel chain). The materials cost for the table is $150 and $275 for the sofa.