# A localretailcompany is planningtoselltwonew products. They have acquiredProductAat R 55eachand theyplan to sellthemata profit ofR100each.Product B can

## Question:

A local retail company is planning to sell two new products. They have acquired Product A at R 55 each and they plan to sell them at a profit of R 100 each. Product B can be acquired at R 30 each and sold at a profit of R100 each. Their total budget for purchasing is R 50 000 per month.

Storage costs are estimated to be R12 each per month for Product A and R 15 each per month for Product B. The storage budget is R 40 000 per month.

Suppliers are capable of supplying a minimum of 150 units and a maximum of 5000 units per week of A. They can also supply a minimum of 200 and a maximum of 1000 units per week of B.

**a) **Formulate the LP problem (5)

**b)** Use Ms Excel Solver to find the maximum profit that the company can make considering all the constraints.(20)

**c)** Use the ISO-profit line method to find the optimum solution(15)

**d) **Use the corner-point method to find the maximum profit.(10)

**Related Book For**

## Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill