Case Problem 2 - PRODUCTION STRATEGY Better Fitness, Inc. (BFI),manufactures exercise equipment at its plant in Freeport, LongIsland. It recently designed two universal weight machines for thehome exercise market. Both machines use BFI-patented technologythat provides the user with an extremely wide range of motioncapability for each type of exercise performed. Until now, suchcapabilities have been available only on expensive weight machinesused primarily by physical therapist. At a recent trade show,demonstration of the machines resulted in significant dealerinterest. In fact, the number of orders that BFI received at thetrade show far exceeded its manufacturing capabilities for thenumber of orders that BFI received at the trade show far exceededits manufacturing capabilities for the current production period.As a result, management decide to begin production of the twomachines. The two machines, which BFI has named the BodyPlus 100and the BodyPlus 200, require different amounts of resources toproduce. The BodyPlus 100 consists of a frame unit, a pressstation, and a pec-dec station. Each frame produced uses 4 hours ofmachining and welding time and 2 hours of painting and finishingtime. Each press station requires 2 hours of machining and weldingtime and 1 hour of painting and finishing time, and each pec-decstation uses 2 hours of machining and welding time and 2 hours ofpainting and finishing time. In addition, 2 hours are spentassembling, testing, and packaging each BodyPlus 100. The rawmaterial costs are $450 for each frame, $300 for each press stationand $250 for each pec-dec station; packaging costs are estimated tobe $50 per unit. The BodyPlus 200 consists of a frame unit, a pressstation, a pec-dec station, and a leg-press station. Each frameproduced uses 5 hours of machining and welding time and 4 hours ofpainting and finishing time. Each press station requires 3 hoursmachining and welding time and 2 hours of painting and finishingtime, and each leg-press station requires 2 hours of machining andwelding time and 2 hours of painting and finishing time. Inaddition, 2 hours are spent assembling, testing, and packaging eachBodyPlus 200. The raw material costs are $650 for each frame, $400for each press station, $250 for each pec-dec station, and $200 foreach leg-press station; packaging costs are estimated to be $75 perunit. For the next production period, management estimates that 600hours of machining And welding time, 450 hours of painting andfinishing time, and 140 hours of assembly, testing, and packagingtime will be available. Current labor costs are $20 per hour formachining and welding time, $15 per hour for painting and finishingtime, and $12 per hour for assembly, testing and packaging time.The market in which the two machines must compete suggests a retailprice of $2400 for the BodyPlus 100 and $3500 for the BodyPlus 200,although some flexibility may be available to BFI because of theunique capabilities of the new machines. Authorized BFI dealers canpurchase machines for 70% of the suggested retail prices. BFI?spresident believes that the unique capabilities of the BodyPlus 200can help position BFI as one of the leaders in high-end exerciseequipment. Consequently, he has stated that the number of units ofthe BodyPlus 200 produced must be least 25% of the totalproduction. Managerial Report Analyze the production problem atBetter Fitness Inc., and prepare a report for BFI?s presidentpresenting your findings and recommendations. Include (but do notlimit your discussion to) a consideration of the following items:1. The recommended number of BodyPlus 100 and BodyPlus 200 machinesto produces. 2. The effect on profits of the requirement that thenumber of units of the BodyPlus 200 produces must be at least 25%of the total production. 3. Where efforts should be expended inorder to increase profits. Include a copy of your linearprogramming model and graphical solution in an appendix to yourreport.

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