A company produces two products: A and B. Product A sells for $11 per unit and product

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A company produces two products: A and B. Product A sells for $11 per unit and product B sells for $23 per unit. Producing a unit of product A requires two hours on assembly line 1 and one unit of raw material. Producing a unit of product B requires two units of raw material, one unit of A, and two hours on assembly line 2. On line 1, 1300 hours of time are avail-able, and 500 hours are available on line 2. A unit of raw material can be bought (for $5 a unit) or produced (at no cost) by using two hours of time on line 1.

a. Determine how to maximize profit.

b. The company will stop buying raw material when the price of raw material exceeds what value? (Use SolverTable.)

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Practical Management Science

ISBN: 978-1305250901

5th edition

Authors: Wayne L. Winston, Christian Albright

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