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3. A company manufactures three different products: A, B, and C. The per-kg profit margins for the three products are $6, $10, and $5. The
3. A company manufactures three different products: A, B, and C. The per-kg profit margins for the three products are $6, $10, and $5. The products could be manufactured using one of two processes. The per-kg production requirements for each product is given below: Table : Per-Unit Production Requirements Process Product A Product B Product C Total Hours Available Process 1 4 hours 6 hours 3 hours 2,000 hours per week Process 2 5 hours 7 hours 4 hours 2,400 hours per week The demand for product A is predicted to be between 50 and 100 kg per week, demand for product B is predicted to be between 150 and 200 kgs per week, and demand for product C to be between 100 and 150 kgs per week. If the company decides to use process 1, it will incur a setup cost of $100 and the setup will take 24 hours. It the company decides to use process 2, it will incur a setup cost of $80 and the setup will take 18 hours. a) Determine the production schedule that will maximize the profits for the company and also determine which of the two processes should be utilized. b) The company is studying the possibility of using both processes at the same time. Would the company benefit from the decision if all the time estimates and costs remains the same? Why? Why not
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