Question

In: Advanced Math

1. A company produces and sells two different products. The demand for each product is unlimited,...

1. A company produces and sells two different products. The demand for each product is unlimited, but the company is constrained by cash availability and machine capacity. Each unit of the first and second product requires 3 and 4 machine hours, respectively. There are 20,000 machine hours available in the current production period. The production costs are $3 and $2 per unit of the first and second product, respectively. The selling prices of the first and second product are $6 and $5.40 per unit, respectively. The available cash is $4,000 and furthermore, 45% of the sales revenues from the first product and 30% from the second product will be made available to finance operations during the current period.
(a) Formulate an LP problem that maximizes the company’s net income subject to cash availability and machine capacity limitations.
(b) Solve the problem graphically to obtain an optimal solution.
(c) Suppose that the company could increase its suitable machine hours by 2,000 after spending $400 for certain repairs. Should the investment be made?

pleas solve all show all steps I Need it as notes no app plz

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Expert Solution

Colby Messinger answered 2 years ago
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