Question
The MSU Company has developed two new products for possible inclusion in its product line for the upcoming Black Friday. Setting up the production facilities
The MSU Company has developed two new products for possible inclusion in its product line for the upcoming Black Friday. Setting up the production facilities to begin production would cost $50,000 for product 1 and $80,000 for product 2. Once these costs are covered, the products would generate a unit profit of $10 for product 1 and $15 for product 2. The MSU Company has two factories that have the capability to manufacture the products. However, to avoid incurring duplicate start-up costs, only one factory will be utilized, and the selection will be based on maximizing profits. If both new products are produced, for organizational purposes, the same factory will be used for both. Factory 1 has the capacity to manufacture Product 1 at a rate of 50 units per hour, and Product 2 at a rate of 40 units per hour. Factory 2 has a lower capacity and can produce Product 1 at a rate of 40 units per hour and Product 2 at a rate of 25 units per hour. There are 500 hours of production time available in Factory 1 and 700 hours of production time available in Factory 2 before Black Friday that can be used to manufacture these products. It is not known whether these two products would be continued after Black Friday. Therefore, the problem is to determine how many units (if any) of each new product should be produced before Black Friday to maximize the total profit. (a) Formulate an MIP model for this problem. (b) Use Python to solve this model.
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