STOMP Manufacturing STOMP, Inc., buys bulk metal (rods, strips, and so on.) and runs it through processing machines to produce parts, which are then sold to consumer products manufacturers. One stamping machine may be used to produce bird-cage hinges, nameplates for hi-fi speakers, or a mix of the two. A case of the hinges requires 15 min of time on the machine, 5 lbs of metal, and sells for $150. A case of the nameplates, requiring 20 machine min and 10 lbs of metal, sells for $300. Any number of hinges, but only 75 cases of nameplates, may be sold per week. The metal used costs $20/1b, and is available in any desired quantity. The marginal costs of running the machine (power, use-related maintenance, and so on.) are about $25 hr. The machine operator is on a 40-hr/wk union contract which must be paid anyway, but is willing to work overtime at $12/hr. Due to delays in receiving payments from customers, STOMP cannot afford to lay out more than $30,000/wk for metal, machine costs, and overtime. OPPORTUNITY COSTS 6.13. STOMP, Inc., purchases varying grades of metal from several sup- pliers and has managed to expand the market for nameplates, which is now able to absorb 80 cases of plates a week. Luckily, the demand for bird cage hinges has remained strong and the market easily absorbs all that STOMP can produce. STOMP's only trouble is its union, which still will not allow its members to operate production machinery for more than 40 hours per week. A new linear program, maximizing weekly profit, has been commissioned. A portion of the output follows. Amount Metal Price bought supplier ($/ton) (ton/wk) Supply constraint Shadow (ton/wk) price Opportunity cost Range 1.5 600 SX 1300 I II III 20 25 22 1000 0 400 1000 2000 1000 2.5 1 ... Price Amount bought Supply constraint Shadow price Range Machine Time $25/hr 40 hr/wk 40 hr/wk 150 35