Question: Suppose that a constraint for assembly time has a shadow price of $70/hour for 10 hours in either direction and that all available assembly time

Suppose that a constraint for assembly time has a

Suppose that a constraint for assembly time has a shadow price of $70/hour for 10 hours in either direction and that all available assembly time is currently used (would require overtime to do more). If the salary of workers is $40 and they receive 50% extra pay for overtime what should management do? Reducing assembly time would save $40/hour but would cost $70/hour in lost profits. Increasing assembly time would cost an extra $60 per hour but increase profits by $70/hour. Doing nothing would not change profits. Reducing assembly time would save $60/hour but would cost $70/hour in lost profits

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