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Miami Products Company has the capability of producing and selling three products Each product has an annual demand potential, a variable contribution to profit, and
Miami Products Company has the capability of producing and selling three products Each product has an annual demand potential, a variable contribution to profit, and an annual fixed cost. The fixed cost can only be avoided if the product is not produced at all. This information is summarized as follows Product Demand Contribution Fixed Cost 400,000 $1.20 $1.80 $60,000 Each product requires work on three machines. The standard productivities hours/unit) and capacities are as follows: Machine / Product 0.003205 0.003846 0.007692 0.002747 0.004808 0.00641 0.001923 0.003205 0.009615 Hours Available 1,900 1,900 1,900 Additionally, the production department has determined that if a product is selected to be produced, at least half of the demand must be made to justify this set-up and investment, and that production values must be full units (i.e. integer values) Construct and solve a Linear Optimization model for this problem in Excel. This will require the use of linking constraints. b. Answer the following questions i. Which products are produced? In what quantities? ii. Which constraints are binding
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