1 HAL produces two types of computers: PCs and VAXes.

The computers are produced in two locations: New York and Los Angeles. New York can produce up to 800 computers and Los Angeles up to 1,000 computers. HAL can sell up to 900 PCs and 900 VAXes. The profit associated with each production site and computer sale is as follows:

New York—PC, $600; VAX, $800; Los Angeles—PC,

$1,000; VAX, $1,300. The skilled labor required to build each computer at each location is as follows: New York—

PC, 2 hours; VAX, 2 hours; Los Angeles—PC, 3 hours;

VAX, 4 hours. A total of 4,000 hours of labor are available.

Labor is purchased at a cost of $20 per hour. Let XNP = PCs produced in New York XLP = PCs produced in Los Angeles XNV = VAXes produced in New York XLV  =VAXes produced in Los Angeles Use the LINDO printout in Figure 17 to answer the following questions:

a If 3,000 hours of skilled labor were available, what would be HAL’s profit?

b Suppose an outside contractor offers to increase the capacity of New York to 850 computers at a cost of

$5,000. Should HAL hire the contractor?

c By how much would the profit for a VAX produced in Los Angeles have to increase before HAL would want to produce VAXes in Los Angeles?

d What is the most HAL should pay for an extra hour of labor?