5 Mondo produces motorcycles at three plants. At each plant, the labor, raw material, and production costs

(excluding labor cost) required to build a motorcycle are as shown in Table 7. Each plant has sufficient machine capacity to produce up to 750 motorcycles per week. Each of Mondo’s workers can work up to 40 hours per week and is paid

$12.50 per hour worked. Mondo has a total of 525 workers and now owns 9,400 units of raw material. Each week, at least 1,400 Mondos must be produced. Let x1 = motorcycles produced at plant 1; x2 = motorcycles produced at plant 2;

and x3 = motorcycles produced at plant 3.

The LINDO output in Figure 10 enables Mondo to minimize the variable cost (labor + production) of meeting demand.

Use the output to answer the following questions:

a What would be the new optimal solution to the problem if the production cost at plant 1 were only $40?

b How much money would Mondo save if the capacity of plant 3 were increased by 100 motorcycles?
c By how much would Mondo’s cost increase if it had to produce one more motorcycle?

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TABLE 6 Product ($) Plant 1 2 3 - 5 6 8 2 8 7 10