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Eliza owns a firm that makes and sells two products, Product A and Product B. Eliza believes the unit contribution margin from Product B is
- Eliza owns a firm that makes and sells two products, Product A and Product B. Eliza believes the unit contribution margin from Product B is $15, but is uncertain about the unit contribution margin from Product A. She estimates that the unit contribution margin of Product A is either $0 or $20, which each being equally likely. Both products are processed on a single machine, which has total capacity of 900 hours. Each unit of Product A requires 5 hours on the machine, while each unit of Product B requires 4 hours on the machine. Both products also require safety testing, and there are a total of 900 hours available for safety testing. Each unit of Product A requires 4 hours of safety testing, while each unit of Product B requires 5 hours of safety testing.
- Using Solver, what product mix will maximize total contribution margin?
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