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1. Exercise One: Ferrari Motors produces three lines of luxury vehicles, Model A, Model B, and Model C. The profits for each model are, $1,350,000,
1. Exercise One: Ferrari Motors produces three lines of luxury vehicles, Model A, Model B, and Model C. The profits for each model are, $1,350,000, $1,465,000 and $2,925,000, respectively. The company expects the daily demand for each model to be at least 250, 125 and 86 units, respectively. Due to limitations in their manufacturing facility, the company cannot exceed 640 units for Model A, 450 units for Model B, and 198 units for model X. Due to global demand, the company has a contractual obligation to send at least 225 units every day to emerging market customers. In addition, the marketing department has requested to avoid brand dilution by limiting total output to 675 units per day. Given your knowledge of Linear Programming, (a) how many units of each model should Tesla Motors produce to maximize daily profits? (b) Create a Sensitivity Report and state, both the Reduced Cost, and the Shadow Price, (c) interpret the significance of both, Reduced cost and the Shadow Price, (d) suppose an emerging markets customer wants to order 1630 units of Model A, is this feasible and why? (6 Points)
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