Boise Lumber has decided to enter the lucrative prefabricated housing business. Initially, it plans to offer three models: standard, deluxe, and luxury. Each house is prefabricated and partially assembled in the factory, and the final assembly is completed on site. The dollar amount of building material required, the amount of labor required in the factory for prefabrication and partial assembly, the amount of on-site labor required, and the profit per unit are as follows. Luxury Model $10,000 Standard Model Deluxe Model Material $6,000 $8,000 Factory Labor (hr) On-Site Labor (hr) 240 220 200 180 210 300 Profit $3,400 $4,000 $5,000 For the first year's production, a sum of $8,200,000 is budgeted for the building material; the number of labor-hours available for work in the factory is not to exceed 209,000 hr; and the amount of labor for on-site work is to be less than or equal to 234,000 labor-hours. Determine how many houses of each type Boise should produce to maximize its profit from this new venture. standard model houses deluxe model houses luxury model houses

Boise Lumber has decided to enter the lucrative prefabricated housing business. Initially, it plans to offer three models: standard, deluxe, and luxury. Each house is prefabricated and partially assembled in the factory, and the final assembly is completed on site. The dollar amount of building material required, the amount of labor required in the factory for prefabrication and partial assembly, the amount of on-site labor required, and the profit per unit are as follows. Luxury Model $10,000 Standard Model Deluxe Model Material $6,000 $8,000 Factory Labor (hr) On-Site Labor (hr) 240 220 200 180 210 300 Profit $3,400 $4,000 $5,000 For the first year's production, a sum of $8,200,000 is budgeted for the building material; the number of labor-hours available for work in the factory is not to exceed 209,000 hr; and the amount of labor for on-site work is to be less than or equal to 234,000 labor-hours. Determine how many houses of each type Boise should produce to maximize its profit from this new venture. standard model houses deluxe model houses luxury model houses

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 5E

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