A small firm intends to increase the capacity of a bottleneck operation by adding a new machine.Two alternatives, A and B, have been identified, and the associated costs and revenues have beenestimated. Annual fixed costs would be $40,000 for A and $30,000 for B; variable costs per unitwould be $10 for A and $11 for B; and revenue per unit would be $15.b. At what volume of output would the two alternatives yield the same profit?

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine.Two alternatives, A and B, have been identified, and the associated costs and revenues have beenestimated. Annual fixed costs would be $40,000 for A and $30,000 for B; variable costs per unitwould be $10 for A and $11 for B; and revenue per unit would be $15.b. At what volume of output would the two alternatives yield the same profit?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter4: Linear Programming Models

Section4.8: Data Envelopment Analysis (dea)

Problem 42P

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