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3 Wivco produces product 1 and product 2 by processing raw material. Up to 90 lb of raw material may be purchased at a
3 Wivco produces product 1 and product 2 by processing raw material. Up to 90 lb of raw material may be purchased at a cost of $10/lb. One pound of raw material can be used to produce either 1 lb of product 1 or 0.33 lb of product 2. Using a pound of raw material to produce a pound of product 1 requires 2 hours of labor or 3 hours to produce 0.33 lb of product 2. A total of 200 hours of labor are available, and at most 40 pounds of product 2 can be sold. Product 1 sells for $13/lb and product 2, $40/lb. Let RM = pounds of raw material processed P1 => pounds of raw material used to produce product 1 P2 = pounds of raw material used to produce product 2 To maximize profit, Wivco should solve the following LP: max z = s.t. 13P140(0.33)P2 - 10RM RMP1 + P2 2P1 + 3P2 200 RM 90 0.33P2 40 P1, P2, RM 0 Use the LINDO output in Figure 19 to answer the follow- ing questions: a If only 87 lb of raw material could be purchased, what would be Wivco's profits? b If product 2 sold for $39.50/lb, what would be the new optimal solution to Wivco's problem? c What is the most that Wivco should pay for another pound of raw material? d What is the most that Wivco should pay for another hour of labor?
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