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A firm manufactures two products, A and B. There is only one machine with 3000 hours available per year. Each unit of product A requires
A firm manufactures two products, A and B. There is only one machine with 3000 hours available per year. Each unit of product A requires 3 machine hours while each unit of Product B requires 2 machine hours. A summary of the profitability of each productis provided below.
Product A Product B
selling price $150 $120
Costs:
DM $60 $15
DL $15 $25
VMOH $15 $20
Maximum yearly demand for Products A is 800 units and for Product B is 1000 units.
Required:
Determine how many units of each product should be produced to maximise yearly profit.
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