Question

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

Solutions

Expert Solution

orchestra answered 2 years ago
Next > < Previous

Related Solutions

2.) A company manufactures two types of products, A and B. The unit revenues are $2...
2.) A company manufactures two types of 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 4 and 6 units, respectively. One unit of A uses 1 unit of M1 and 1 unit of M2, and one unit of B uses 1 unit of M1 and 2 units of M2. a) Formulate a linear programming model and obtain the...
Friendly Co. produces two products, A and B. The sales volume for A is at least...
Friendly Co. produces two products, A and B. The sales volume for A is at least 80% of the total sales of both A and B. However, the company cannot sell more than 110 units of A per day. Both products use one raw material, of which the maximum daily availability is 300 kg. The usage rates of the raw material are 2 kg per unit of A, and 4 kg per unit of B. The profit units for A...
JOBCO produces two products on two machines. A unit of product 1 requires 2 hours on...
JOBCO produces two products on two machines. A unit of product 1 requires 2 hours on machine 1 and 1 hour on machine 2. For product 2, a unit requires 1 hour on machine 1 and 3 hours on machine 2. The revenues per unit of products 1 and 2 are $30 and $20, respectively. The total daily processing time available for each machine is 8 hours. Letting x1 and x2 represent the daily number of units of products 1...
Henna Co. produces and sells two products, T and O. It manufactures these products in separate...
Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 43,000 units of each product. Sales and costs for each product follow. Product T Product O Sales $ 761,100 $ 761,100 Variable costs 608,880 76,110 Contribution margin 152,220 684,990 Fixed costs 33,220 565,990 Income before taxes 119,000 119,000 Income taxes (30% rate) 35,700 35,700 Net income $...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 48,000 units of each product. Sales and costs for each product follow. Product T Product O   Sales $ 825,600 $ 825,600   Variable costs 577,920 165,120   Contribution margin 247,680 660,480   Fixed costs 113,680 526,480   Profit before taxes 134,000 134,000   Income taxes (32% rate) 42,880 42,880   Net profit $...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 53,000 units of each product. Sales and costs for each product follow. Product T Product O   Sales $ 863,900 $ 863,900   Variable costs 604,730 86,390   Contribution margin 259,170 777,510   Fixed costs 116,170 634,510   Profit before taxes 143,000 143,000   Income taxes (40% rate) 57,200 57,200   Net profit $...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 53,000 units of each product. Sales and costs for each product follow. Product T Product O   Sales $ 863,900 $ 863,900   Variable costs 604,730 86,390   Contribution margin 259,170 777,510   Fixed costs 116,170 634,510   Profit before taxes 143,000 143,000   Income taxes (40% rate) 57,200 57,200   Net profit $...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate...
Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 48,000 units of each product. Sales and costs for each product follow. Product T Product O   Sales $ 825,600 $ 825,600   Variable costs 577,920 165,120   Contribution margin 247,680 660,480   Fixed costs 113,680 526,480   Profit before taxes 134,000 134,000   Income taxes (32% rate) 42,880 42,880   Net profit $...
Henna Co. produces and sells two products, T and O. It manufactures these products in separate...
Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 58,000 units of each product. Sales and costs for each product follow. Product T Product O Sales $ 974,400 $ 974,400 Variable costs 779,520 194,880 Contribution margin 194,880 779,520 Fixed costs 46,880 631,520 Income before taxes 148,000 148,000 Income taxes (32% rate) 47,360 47,360 Net income $...
Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per unit):...
Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per unit): Product A B C Selling price $ 84.00 $ 70.00 $ 74.00 Variable expenses: Direct materials 25.20 21.00 9.00 Other variable expenses 25.20 31.50 42.80 Total variable expenses 50.40 52.50 51.80 Contribution margin $ 33.60 $ 17.50 $ 22.20 Contribution margin ratio 40 % 25 % 30 % The company estimates that it can sell 750 units of each product per month. The same...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT