A company produces two types of products, A and B. The company has a fixed production cost
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A company produces two types of products, A and B. The company has a fixed production cost of $2000 per day and a variable cost of $10 per unit of product A and $15 per unit of product B. The company can sell product A for $30 per unit and product B for $35 per unit. The daily demand for product A follows a normal distribution with mean 150 and standard deviation 20, while the daily demand for product B follows a normal distribution with mean 100 and standard deviation 15. Assume that the company can produce and sell any amount of each product. Determine the optimal production quantity of each product that maximizes the company's profit.
Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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