MANAGERIAL ECONOMICS (ECON 510)

INTRODUCTORY PROBLEM (SITUATION) TRY TO FIND A REASONABLE SOLUTION [AN APPROACH ANYWAY)

Captain John's Seagoing Vessel Dilema

Captain John's Yachts, Inc., located in Fort Lauderdale, Florida, rents three types of ocean- going boats: sailboats, cabin cruisers, and Captain John's favorite, the luxury yachts. Captain John advertises his boats with his famous "you rent - we pilot" slogan, which means that company supplies the captain and crew for each rented boat. Each rented boat has one captain, of course, but the crew sizes (deck hands, galley hands, etc.) differ. The crew requirements, in addition to a captain, are one for sailboats, two for cabin cruisers, and three for yachts. Ten employees are captains, and an additional 18 employees fill the various crew positions. Currently, Captain John has rental requests for all of his boats: four sailboats, eight cabin cruisers, and three luxury yachts. If Captain John's daily profit contribution is $50 for sailboats, $70 for cruisers, and $100 for luxury yachts, how many boats of each type should he rent?

1) Discuss Captain John's dilemma. Advise him.

2) Explain to him the basis for your advice. After all, the 'ol C'pmum wants to make as much moolah' as possible!