plant has sufficient capacity to manufacture any combination of four different products (A, B, C, D).  For each product, time is required to be invested in four different machines, which is expressed in hours per kilogram of product,  as shown in the following table as shown in the following table: (attached image) Each machine has an availability of 60 hours per week. Products A, B, C and D can be sold at $9, $7, $6 and $5 per kilo, respectively. Variable labor costs are $2 per hour for machines 1 and 2, and $3 per hour for machines 3 and 4.  The material costs for each kilogram of product A are $4. The material costs for each kilogram of products B, C, D and D are $4 each kilogram of products B, C and D are $1. What needs to be done: Formulate a profit-maximizing PL model given the maximum demand per product shown in the table (there are 16 variables). Note: Do it by hand, no computer

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
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A plant has sufficient capacity to manufacture any combination of four different products (A, B, C, D). 
For each product, time is required to be invested in four different machines, which is expressed in hours per kilogram of product,  as shown in the following table as shown in the following table:

(attached image)

Each machine has an availability of 60 hours per week. Products A, B, C and D can be sold at $9, $7, $6 and $5
per kilo, respectively. Variable labor costs are $2 per hour for machines 1 and 2, and $3 per hour for machines 3 and 4.  The material costs for each kilogram of product A are $4. The material costs for each kilogram of products B, C, D and D are $4 each kilogram of products B, C and D are $1.

What needs to be done:
Formulate a profit-maximizing PL model given the maximum demand per product shown in the table (there are 16 variables).

Note:

Do it by hand, no computer

Machines
Product
2
3
4 Maximum Demand
A
0.083
0.167
0.1
0.05
400
B
0.05
0.1
0.067
0.133
100
0.067
0.083
0.05
0.05
150
D
0.067
0.033
0.017
0.033
500
Transcribed Image Text:Machines Product 2 3 4 Maximum Demand A 0.083 0.167 0.1 0.05 400 B 0.05 0.1 0.067 0.133 100 0.067 0.083 0.05 0.05 150 D 0.067 0.033 0.017 0.033 500
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