1 Monetary data on types of books Fixed cost Variable cost Selling price Maximum demand Book 1 $80,000 $44 $80 Book 2 Book 3 $60,000 $100,000 $36 $40 $64 $80 Book 4 Book 5 $120,000 $160,000 $30 $50 $76 $100 6000 8000 8000 6000 10000 Book 1 0 Book 2 0 Book 3 1 Book 4 1 Book 5 1 Production plan Produced (in 1000s) Effective Demand (Logical upper bounds) -38654684 6000 -30064801 -4E+007 -49392119 -5E+007 <= 8000 8000 6000 10000 (a) No more than three different books can be published. Number published Max number 3 3 (b) If Book 4 is published, then Book 5 must be published. Book 4 Book 5 (c) If Book 2 is published, then Book 1 cannot be published. Book 2 0 Book 1 1 Summary of costs, revenue (all in $) Fixed cost Variable cost Revenue Profit $380,000 -$8,667,243,652 -$17,575,005,328 $8,908,141,676 Total Maximum Total Production (in copies) 20000 Problem 2 Initial cash Maximum allowable withdrawal each day Fixed cost of withdrawal (service fee) $60 $250 $3.00 Opportunity cost/$1/day Days to withdraw Mon Tue Wed Thur Fri Sat Sun Amount withdrawn Effective maximum Cash requirement Cash on hand at end of day Summary of costs (in dollars) Withdrawal cost Opportunity cost Total cost $80 $35 $95 $100 $180 $220 $25