Machinco produces four products, requiring time ontwo machines and two types (skilled and unskilled) of labor.The amount of machine time and labor (in hours) used byeach product and the sales prices are given in Table 13.Each month, 700 hours are available on machine 1 and 500hours on machine 2. Each month, Machinco can purchaseup to 600 hours of skilled labor at $8 per hour and up to650 hours of unskilled labor at $6 per hour. Formulate anLP that will enable Machinco to maximize its monthlyprofit. Solve this LP and use the output to answer thefollowing questions:a By how much does the price of product 3 have to increase before it becomes optimal to produce it?b If product 1 sold for $290, then what would be thenew optimal solution to the problem?c What is the most Machinco would be willing to payfor an extra hour of time on each machine?d What is the most Machinco would be willing to payfor an extra hour of each type of labor?e If up to 700 hours of skilled labor could be purchased each month, then what would be Machinco’smonthly profits?
Machinco produces four products, requiring time on
two machines and two types (skilled and unskilled) of labor.
The amount of machine time and labor (in hours) used by
each product and the sales prices are given in Table 13.
Each month, 700 hours are available on machine 1 and 500
hours on machine 2. Each month, Machinco can purchase
up to 600 hours of skilled labor at $8 per hour and up to
650 hours of unskilled labor at $6 per hour. Formulate an
LP that will enable Machinco to maximize its monthly
profit. Solve this LP and use the output to answer the
following questions:
a By how much does the price of product 3 have to increase before it becomes optimal to produce it?
b If product 1 sold for $290, then what would be the
new optimal solution to the problem?
c What is the most Machinco would be willing to pay
for an extra hour of time on each machine?
d What is the most Machinco would be willing to pay
for an extra hour of each type of labor?
e If up to 700 hours of skilled labor could be purchased each month, then what would be Machinco’s
monthly profits?
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