Candy Kane Cosmetics (CKC) produces Leslie Perfume,which requires chemicals and labor. Two productionprocesses are available: Process 1 transforms 1 unit of laborand 2 units of chemicals into 3 oz of perfume. Process 2transforms 2 units of labor and 3 units of chemicals into5 oz of perfume. It costs CKC $3 to purchase a unit of laborand $2 to purchase a unit of chemicals. Each year, up to20,000 units of labor and 35,000 units of chemicals can bepurchased. In the absence of advertising, CKC believes itcan sell 1,000 oz of perfume. To stimulate demand forTAB LE 48Producing a Ton of SteelSteel 1 Steel 2Time TimeMill Cost (Minutes) Cost (Minutes)1 $10 20 $11 222 $12 24 $ 9 183 $14 28 $10 30†Based on Heady and Egbert (1964).TAB LE 49Farm 1 Farm 2Corn yield/acre (bushels) 500 650Cost/acre of corn ($) 100 120Wheat yield/acre (bushels) 400 350Cost/acre of wheat ($) 90 80Leslie, CKC can hire the lovely model Jenny Nelson. Jennyis paid $100/hour. Each hour Jenny works for the companyis estimated to increase the demand for Leslie Perfume by200 oz. Each ounce of Leslie Perfume sells for $5. Uselinear programming to determine how CKC can maximizeprofits.
Candy Kane Cosmetics (CKC) produces Leslie Perfume,
which requires chemicals and labor. Two production
processes are available: Process 1 transforms 1 unit of labor
and 2 units of chemicals into 3 oz of perfume. Process 2
transforms 2 units of labor and 3 units of chemicals into
5 oz of perfume. It costs CKC $3 to purchase a unit of labor
and $2 to purchase a unit of chemicals. Each year, up to
20,000 units of labor and 35,000 units of chemicals can be
purchased. In the absence of advertising, CKC believes it
can sell 1,000 oz of perfume. To stimulate demand for
TAB LE 48
Producing a Ton of Steel
Steel 1 Steel 2
Time Time
Mill Cost (Minutes) Cost (Minutes)
1 $10 20 $11 22
2 $12 24 $ 9 18
3 $14 28 $10 30
†
Based on Heady and Egbert (1964).
TAB LE 49
Farm 1 Farm 2
Corn yield/acre (bushels) 500 650
Cost/acre of corn ($) 100 120
Wheat yield/acre (bushels) 400 350
Cost/acre of wheat ($) 90 80
Leslie, CKC can hire the lovely model Jenny Nelson. Jenny
is paid $100/hour. Each hour Jenny works for the company
is estimated to increase the demand for Leslie Perfume by
200 oz. Each ounce of Leslie Perfume sells for $5. Use
linear programming to determine how CKC can maximize
profits.
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