A chemical manufacturer uses chemicals 1 and 2 to produce two drugs. Drug 1 must be at least 80% chemical 1, and drug 2 must be at least 50% chemical 2. Up to 70,000 ounces of drug 1 can be sold at \$40 per ounce; up to 50,000 ounces of drug 2 can be sold at \$25 per ounce. Up to 45,000 ounces of chemical 1 can be purchased at \$15 per ounce, and up to 65,000 ounces of chemical 2 can be purchased at \$19 per ounce. Determine how to maximize the manufacturer’s profit.

Practical Management Science

6th Edition
WINSTON + 1 other
Publisher: Cengage,
ISBN: 9781337406659

Practical Management Science

6th Edition
WINSTON + 1 other
Publisher: Cengage,
ISBN: 9781337406659

Solutions

Chapter
Section
Chapter 4, Problem 54P
Textbook Problem

A chemical manufacturer uses chemicals 1 and 2 to produce two drugs. Drug 1 must be at least 80% chemical 1, and drug 2 must be at least 50% chemical 2. Up to 70,000 ounces of drug 1 can be sold at \$40 per ounce; up to 50,000 ounces of drug 2 can be sold at \$25 per ounce. Up to 45,000 ounces of chemical 1 can be purchased at \$15 per ounce, and up to 65,000 ounces of chemical 2 can be purchased at \$19 per ounce. Determine how to maximize the manufacturer’s profit.

Expert Solution
Summary Introduction

To determine: The way to maximize the manufacturer’s profit.

Linear programming:

It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.

Explanation of Solution

Model:

Solver input:

The solver input is selected from under the “Data” tab in Excel and the input is given as shown below:

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