A product can be produced on four different machines. Each machine has a fixed setup cost, variable production cost per unit processed, and a given production capacity given below. A total of 2,500 units of the product must be produced. Machine 1 Machine 2 Machine 3 Machine 4 Fixed cost $700 $800 $920 $1,000 Var cost $16 $18 $22 $20 Capacity 900 1,000 1,200 1,600 Answer the following questions: a) What is the value of the objective function? b) At the optimum, what is the capacity utilization (in %) of machine 4 (round to nearest 0.1% but don't include %-sign))? 37.5 c) Suppose marketing has established a price of $19 for this product. How much total profit will you make?

Question
A product can be produced on four different machines. Each machine has a fixed setup cost, variable production cost per unit processed,
and a given production capacity given below. A total of 2,500 units of the product must be produced.
Machine 1 Machine 2 Machine 3 Machine 4
Fixed cost $700 $800 $920 $1,000
Var cost $16 $18 $22 $20
Capacity 900 1,000 1,200 1,600
Answer the following questions:
a) What is the value of the objective function?
b) At the optimum, what is the capacity utilization (in %) of machine 4 (round to nearest 0.1% but don't include %-sign))?
37.5
c) Suppose marketing has established a price of $19 for this product. How much total profit will you make?
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Transcribed Image Text

A product can be produced on four different machines. Each machine has a fixed setup cost, variable production cost per unit processed, and a given production capacity given below. A total of 2,500 units of the product must be produced. Machine 1 Machine 2 Machine 3 Machine 4 Fixed cost $700 $800 $920 $1,000 Var cost $16 $18 $22 $20 Capacity 900 1,000 1,200 1,600 Answer the following questions: a) What is the value of the objective function? b) At the optimum, what is the capacity utilization (in %) of machine 4 (round to nearest 0.1% but don't include %-sign))? 37.5 c) Suppose marketing has established a price of $19 for this product. How much total profit will you make?

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