1 Monetary data on types of books Fixed cost Variable cost Selling price Maximum demand Book 1 $80,000 $44 $80 Book 2 Book 3 Book 4 Book 5 $60,000 $100,000 $120,000 $160,000 $36 $40 $30 $50 $64 $80 $76 $100 6000 8000 8000 6000 10000 Book 1 Book 2 Book 3 Book 4 Book 5 Production plan Total Maximum Total Production (in copies) 20000 (a) No more than three different books can be published. (b) If Book 4 is published, then Book 5 must be published. (c) If Book 2 is published, then Book 1 cannot be published. Summary of costs, revenue (all in $) Fixed cost Variable cost Revenue Profit Problem 2 Plant to warehouse unit production, shipping costs, plant fixed costs, plant capacities Warehouse Plant 1 2 3 Fixed cost 1 $2,400 $1,600 $2,000 $80,000 2 $1,400 $1,400 $1,000 $84,000 3 $1,000 $1,600 $1,200 $90,000 4 $1,400 $1,000 $1,200 $80,000 5 $1,000 $1,400 $1,200 $70,000 Warehouse to customer unit shipping costs, warehouse fixed costs Customer Warehouse 1 2 3 4 1 $100 $100 $80 $60 2 $120 $160 $140 $80 3 $180 $120 $160 $160 Plant use decisions Plant 1 2 3 4 5 Plant to warehouse shipments (tons) Warehouse Plant 1 1 2 3 4 5 Shipped in Shipped out Warehouse use decisions Warehouse 1 2 3 2 Warehouse to customer shipments (tons) Customer Warehouse 1 2 1 2 3 Shipped in Demand 5000 3000 Summary of costs Plant to warehouse Warehouse to customer Fixed plant Fixed warehouse Total cost Fixed cost $120,000 $80,000 $40,000 3 3 6000 Shipped out Capacity 4 Shipped out 4000 Capacity 6000 4000 6000 8000 4000