Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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,

image text in transcribed
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)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing and Assurance Services A Systematic Approach

Authors: William Messier Jr, Steven Glover, Douglas Prawitt

10th edition

77732502, 978-0077732509

More Books

Students also viewed these Accounting questions

Question

How does your city sequence/schedule snow plowing?

Answered: 1 week ago