If output of one of the products needs to be restricted and management want to lose as little profit as possible, which of the product line’s outputs should they restrict?
If output of one of the products needs to be restricted and management want to lose as little profit as possible, which of the product line’s outputs should they restrict?
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter13: Nonlinear Optimization Models
Section: Chapter Questions
Problem 4P: The profit function for two products is: Profit3x12+42x13x22+48x2+700, where x1 represents units of...
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Question
Below are details of the four products made by Krane Ltd.
|
A |
B |
C |
D |
Selling price per unit |
60 |
80 |
100 |
120 |
Variable cost per unit |
24 |
36 |
48 |
50 |
Machine time per unit |
3 |
4 |
6.5 |
8 |
Weekly demand for all products is the same. Unfortunately, time available on the machine used to produce all four products is likely to be reduced in the coming week due to maintenance work required. If output of one of the products needs to be restricted and management want to lose as little profit as possible, which of the product line’s outputs should they restrict?
- Product A
- Product B
- Product C
- Product D
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