The controller of the Rustler Company attended a seminar on linear programming and feels that some of the concepts may be useful in planning operations for the coming year. The Rustler Company produces two models (Standard and Deluxe) of its basic product. The company can sell as many of each unit as it can produce.

The controller has prepared the following estimates of prices and costs (per unit) for the coming year.

Direct material A cost \(\$ 9\) per kilogram and the company can purchase up to 60,000 kilograms from its supplier. Direct material B is in short supply and Rustler Company can only acquire 90,000 liters at a price of \(\$ 1.25\) per liter. Direct labor is paid \(\$ 4.50\) an hour and the capacity of the factory is 20,000 direct labor hours.
Required:
Set up in algebraic form the linear programming equations relevant to this problem.

Transcribed Image Text:

Standard Deluxe Selling price $112.00 $152.00 Direct material A $ 54.00 $108.00 Direct material B $ 18.75 $ 18.75 Direct labor $ 18.00 $ 9.00 Variable overhead $ 6.25 $ 6.25