The T. E. Callarman Appliance Company is thinking of manufacturing and selling trash compactors on an...

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The T. E. Callarman Appliance Company is thinking of manufacturing and selling trash compactors on an experimental basis over the next 6 months. The manufacturing costs and selling prices of the compactors are projected to vary from month to month. Following table gives these forecast costs and prices. Month July August September October November December Manufacturing Cost $60 $60 $50 $60 $70 Selling Price (During Month) $80 $60 $70 $80 $90 All compactors manufactured during any month are shipped out in one large load at the end of that month. The firm can sell as many as 300 units per month, but its operation is limited by the size of its warehouse, which holds a maximum of 100 compactors. Callarman's operations manager, needs to determine the number of compactors to manufacture and sell each month to maximize the firm's profit. Callarman has no compactors on hand at the beginning of July and wishes to have no compactors on hand at the end of the test period in December. The T. E. Callarman Appliance Company is thinking of manufacturing and selling trash compactors on an experimental basis over the next 6 months. The manufacturing costs and selling prices of the compactors are projected to vary from month to month. Following table gives these forecast costs and prices. Month July August September October November December Manufacturing Cost $60 $60 $50 $60 $70 Selling Price (During Month) $80 $60 $70 $80 $90 All compactors manufactured during any month are shipped out in one large load at the end of that month. The firm can sell as many as 300 units per month, but its operation is limited by the size of its warehouse, which holds a maximum of 100 compactors. Callarman's operations manager, needs to determine the number of compactors to manufacture and sell each month to maximize the firm's profit. Callarman has no compactors on hand at the beginning of July and wishes to have no compactors on hand at the end of the test period in December.

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To maximize the firms profit we need to consider the difference between the selling price and the manufacturing cost for each month and manufacture as ... View the full answer