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In: Statistics and Probability

Prime Co. produces two products, A and B. The unit revenues are $2 and $3, respectively....

Prime Co. produces two products, A and B. The unit revenues are $2 and $3, respectively. Two
raw materials, M1 and M2, used in the manufacture of the two products have daily availabilities
of 8 and 18 units, respectively. One unit of A uses 2 units of M1 and 2 units of M2, while one
unit of B uses 3 units of M1 and 6 units of M2.
(a) Using simplex method, determine the dual prices of M1 and M2 and their feasibility ranges.
(b) Suppose that 2 additional units of M1 can be acquired at the cost of 25 cents per unit.
Would you recommend the additional purchase? Justify your answer.
(c) Due to a change in people’s preferences, the unit revenue of A changes to $(2 + ?).
Determine the optimality range for ? so that the optimum solution stays the same.

show the steps please

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Expert Solution

orchestra answered 2 years ago
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