Question
61. Sales maximization-allocation of funds: A manufacturer is planning to sell a new product at the price of $150 per unit and estimates that if
61. Sales maximization-allocation of funds: A manufacturer is planning to sell a new product at the price of $150 per unit and estimates that if x thousand dollars is spent on development and y thousand dollars is spent on promotion, approximately 320y 160x y+ 2x+4 units of the product will be sold. The cost of manufacturing the product is $50 per unit. If the manufacturer has a total of $8,000 to spend on development and promotion, how should this money be allocated to generate the largest possible profit? [Hint: Profit=(number of unitskprice per unit-cost per unit)-total amount spent on development and promotion) How much should be spend on labour, how much on equipment development?
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