TW manufactures two products, the D and the E, using the same material for each. Annual demand
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Question:
TW manufactures two products, the D and the E, using the same material for each. Annual demand for the D is 9,000 units, while demand for the E is 12,000 units. The variable production cost per unit of the D is $10, that of the E $15. The D requires 3.5 kg of raw material per unit, the E requires 8 kg of raw material per unit. Supply of raw material will be limited to 87,000 kg during the year.
A sub-contractor has quoted prices of $17 per unit for the D and $25 per unit for the E to supply the product. How many of each product should TW manufacture in order to maximise profits
Required
Fill in the blanks in the sentence below.
TW should manufacture ........... units of D and .............. units of E to maximise profits.
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