# F4 Performance Mangement Question

C2XVT
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**62**Registered
Just a a quick question...

With the linear programming question in this paper, would you actually have to draw the graph or did they just give the graph with the reference points?

Questions: http://www.accaglobal.com/pubs/students/acca/exams/f4/past_papers/bwa/f4bwa_2008_jun_q.pdf

Answers: http://www.accaglobal.com/pubs/students/acca/exams/f4/past_papers/bwa/f4bwa_2008_jun_a.pdf

With the linear programming question in this paper, would you actually have to draw the graph or did they just give the graph with the reference points?

Questions: http://www.accaglobal.com/pubs/students/acca/exams/f4/past_papers/bwa/f4bwa_2008_jun_q.pdf

Answers: http://www.accaglobal.com/pubs/students/acca/exams/f4/past_papers/bwa/f4bwa_2008_jun_a.pdf

## Comments

347Registered347RegisteredHoping that doesnt come up on Monday!

373Registeredhttp://www.accaglobal.com/pubs/students/acca/exams/f5/past_papers/f5_2008_jun_a.pdf

Good luck for Monday!

62RegisteredThanks for the reply though, damn! I was hoping there was no drawing of graphs, i just dont understand where the plotting lines come from :-/

347RegisteredSame paper June 2008 Question 1 re Chaff Co.

Part B - Labour efficiency and Labour idle time. How do they get the labour rate of £20 per hour???

I thought the formula was (Standard hours produced - Actual worked) x Standard Rate (which is £18 per hour).

The answer states £20 but with no explaination as to how.

Thanks

347RegisteredIdle time is 10% of hours paid therefore £18 x 100 / 90 = £20

62RegisteredI've been through 4 papers today my eyes have gone funny! How are you getting on?

347RegisteredI'm sitting mine at Preston football stadium - were will u be?

62RegisteredIm just going through some tricky questions today (well ones I find tricky).

It seems that around 1/3 of the paper is related to full text questions, i really need to nail this this afternoon as these will make or break me.

Im not confident to be honest, im still not getting the answers right :-(

347RegisteredAs long as I get more than 50% to pass. It will really depend on the questions on the day. Some past papers I find fine, where as others I think I would cry if I opened the paper and saw them.

Hope you do ok. Let me know how you get on.

62RegisteredI've got my head round regression / linear programming and some of the text questions. But as you say its going to be the luck of the draw when i see the paper.

I still cant plot the damned Higgins and Co graph, i just dont understand how the values on the 2 axis were derrived - that has me a bit worried as the calculating element is fine!

Good luck with you exam too by the way

56RegisteredHello C2XVT,

I thought I would try to respond and explain where the lines come from. Personally I am not doing ACCA but I can figure out what is going on in the question from my limited knowledge of mathematics.

In linear programming what you need to bear in mind is the formula for a straight line:

y = mx + c or a more recent alternative is y = a + bx. These two equations are essentially the same. But if we use the first equation what we are saying is that we can plot the coordinates of a line where the y values are dependent on the x values. In other words we can determine the y values if given the x values. Let's say for example that for a business sales is dependent upon advertising. Sales here would be the dependent variable which goes on the vertical (Y) axis and advertising would be the independent variable which goes on the horizontal (X) axis. If we then assume a range of values for advertising we can substitute these in the equation to determine the projected values for the sales (Y). So for this equation what we expect to see is a straight line sloping upwards from left to right because we expect that as advertising (X, independent variable) increases then sales (Y, dependent variables) also increases. So the line is plotted using the X values we have selected and the Y values obtained when substituting the X values into the equation.

Now I have explained the X and Y in the equation but not m and c. Well m measures the gradient or the slope of the line and c is a positive constant where the line cut's the y axis. What this positive constant means is that even if advertising (X) was 0 then sales would still be a positive figure. In other words if we substituted 0 for X in the equation we would have y = m times 0 + c. Therefore y is equal to 0 + c or just c.

Referring back to the Higgins Co question therefore they have basically substituted Y for P and X for S to show that the number of Pool cues produced also depends on the number of snooker cues because of the limiting factors. Anyway these are the basic underlying principles you need to know in order to plot the lines on the graph.

56RegisteredTo continue where I left off let me now explain where the lines come from. We know from the question that demand in any period is15,000 pool cues and 12,000 snooker cues. Therefore demand for pool and snooker cues are therefore independent of each other so if we were to reflect this in the equation y = mx + c we could have p = ms + c (substituting y and x for p and s. So to extend this p = ms + 15000. When s is zero P equals to 15000. You therefore draw a straight line through the point of 15000 on the P (y) axis. This line therefore reflects the fact that maximum demand for P will never be influenced by S as it is parallel to the S (x) axis. Similarly the line for Max S can be derived by simply drawing a line through the point at 12000 on the S axis. Note that the graph is drawn to a scale of 2 units representing 2000 cues.

Now let’s look at the line for Ash. We know that only a maximum of 5400kg of Ash is available in the period and each pool and snooker cue uses 270g. Expressing this as an equation: 0.27P + 0.27S = 5400. If we produced no snooker cues then the maximum Pool cues we can produce would be 20,000 since 0.27P +0.27x0 = 5400; therefore P = 5400 / 0.27 = 20000. Similarly if we produced no Pool cues then the maximum Snooker cues we can produce is 20,000. You then mark the points of 20,000 on the P and S axis and draw a line through it and that is your Ash line. The line slopes from right to left to show that the production of Pool cues is inversely proportional to Snooker cues and vice versa. In other words the more Pool cues we produce the less Snooker cues we can produce as we move along the line because we are limited by the amount of Ash we have.

The Craftsmen line is very similar to the Ash line. Again we only have 12000hrs for Craftsmen labour hours and we know that 1 Pool cue takes craftsmen 0.5hrs and 1 Snooker cue takes craftsmen 0.75hrs. So again the equation will be 0.5P + 0.75S = 12000. So following the Ash line example if we produce no Snooker cues then the maximum Pool cues we could make given the maximum labour time we have available would be 12000/0.5 = 24000. And the maximum Snooker cues we could produce if we did not produce any Pool cues would be 12000/0.75 = 16000. So you mark these points on the corresponding axis and draw a line through them.

So the last line we have left is the Max Contribution line. We know that 1 Pool cue gives us $20 in contribution and 1 Snooker cue gives $40. So effectively it takes two cues to earn the same amount of contribution as 1 snooker cue (i.e. twice as many). This is why the points of 4 on the P axis and 2 on the S axis are selected for the dotted contribution line. You could then use two set squares to construct the maximum contribution line through point D. The rationale is that the points ABCDE are the feasible region given the resource constraints. So contribution is maximized at point D as that is the last point where the line touches the feasible region.

Hope this helps in explaining the lines.

PS: There is a slight error here as the 270g should be converted to kilograms by dividing by 1000. So in the equations it should be written as 0.27(kg).