question archive Max Company produces Lady Lotion, which requires chemicals and labour
Max Company produces Lady Lotion, which requires chemicals and labour
Subject:StatisticsPrice: Bought3
Max Company produces Lady Lotion, which requires chemicals and labour. Two production processes are available: Process 1 transforms 1 unit of labour and 2 units of chemicals into 3 lb of lotion. Process 2 transforms 2 units of labour and 3 units of chemicals into 5 lb of lotion. It costs Max $3 to purchase a unit of labour and $2 to purchase a unit of chemicals. Each year, up to 20,000 units of labour and 35,000 units of chemicals can be purchased. In the absence of advertising, Max believes it can sell 1,000 lb of lotion. To stimulate demand for Lady Lotion, Max can hire the lovely model Leslie. Leslie is paid $100/hour. Each hour Leslie works for the company is estimated to increase the demand for Lady Lotion by 200 lb. Each ounce of Lady Lotion sells for $5. Use linear programming to determine how Max can maximize the profits. f
