Bexter Labs produces three products: A, B, and C. Bexter can sell up to 3000 units of

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Bexter Labs produces three products: A, B, and C. Bexter can sell up to 3000 units of product A, up to 2000 units of product B, and up to 2000 units of product C. Each unit of product C uses two units of A and three units of B and incurs $5 in processing costs. Products A and B are produced from either raw material 1 or raw material 2. It costs $6 to purchase and process one unit of raw material 1. Each processed unit of raw material 1 yields two units of A and three units of B. It costs $3 to purchase and process a unit of raw material 2. Each processed unit of raw material 2 yields one unit of A and two units of B. The unit prices for the products are: A, $5; B, $4; and C, $25. The quality levels of each product are: A, 8; B, 7; and C, 6. The average quality level of the units sold must be at least 7. Determine how to maximize Bexter’s profit.

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Practical Management Science

ISBN: 1497

5th Edition

Authors: Wayne L. Winston, Christian Albright

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