Question

The production planner for Airbus showed his boss the latest product mix suggestion from their slick new linear programming model: 12.5 model 320s and 17.4 model 340s. The boss looked over his glasses at the production planner and reminded him that they had several unsold half airplanes from last year's production rusting in the parking lot. No one, it seems, is interested in half of an airplane. The production planner whipped out his red pen and crossed out the .5 and .4, turning the new plan into 12 model 320s and 17 model 340s. This production plan is definitely feasible.

a True
b False

Answer 1

The Airbus production plan involving whole units of airplanes (12 model 320s and 17 model 340s) is feasible, while the fractional units are not. The discussion touches upon production possibilities, opportunity costs, market demand, and long-run average costs, essential concepts in business management.

Step-by-step explanation:

The scenario presented involves a production planner at Airbus using a linear programming model to determine the optimal mix of aircraft to produce. However, the output of the model in decimals, such as 12.5 model 320s and 17.4 model 340s, is considered infeasible since airplanes cannot be produced in fractions. Therefore, the production planner's correction to produce 12 model 320s and 17 model 340s might be seen as feasible in terms of whole unit production.

In addition, the provided text discusses the production possibilities curve and opportunity costs for a firm named Alpine Sports in the context of producing skis and snowboards, which is a different scenario. It's important to note that such concepts are central to business decision-making, particularly in operations and production management. In the commercial aircraft industry, production feasibility also includes considering market demand and manufacturing constraints, aside from the whole unit requirements.

Considering the market demand curve and the long-run average cost (LRAC) curve for airplane production, a firm must be mindful of the market size to avoid producing an excess that cannot be sold, highlighting the importance of economies of scale and potential barriers to entry for new firms in the market.