Answer:
A manufacturing firm has discontinued production of a certain...
A manufacturing firm has discontinued production of a certain unprofitable product line. This has created considerable excess production capacity. Management is considering devoting this excess capacity to one or more of three products: product 1, 2 and 3. The available capacity on the machines which might limit output is summarized in the following table (12 Points):
Machine Type
Available Time
(in Machine- hours per Week)
Milling Machine
250
Lather
150
Grinder
50
The number of machine-hour required for each unit of the respective product is as follows
Machine Type
Productivity in Machine-hours per Unit)
Product 1
Product 2
Product 3
Milling Machine
8
2
3
Lathe
4
3
-
Grinder
2
-
1
The profit per unit would be Birr 20, Birr 6, and Birr 4 respectively for product 1, 2 and 3. Find how much of each product the firm should produce in order to maximize profit.
a. Formulate the model for LP
b. Solve the LPM using simplex algorithm.
c. Interpret the optimal solution.
Step-by-step explanation: