The Pyrotec Company Produces three electrical products- clocks, radios, and toasters, these products have the following resource requirements:

	Cost/Unit	Labor hours/Unit
clock	$7	2
Radio	10	3
toaster	5	2

The manufacturer has a daily production budget of $2000 and a maximum of 660 hours of labor. Maximum daily customer demand is for 200 clocks, 300 radios, and 150 toasters. Clocks sell for $15, radios for $20, and toaster for $12. The company wants to know the optimal product mix that will maximize profit.

Answer the following questions:

If the company may invest in only one resource, what should they invest in?

For every unit increase in such resource, what would be the return on investment?

If they had some spare funds to spend on advertising in hopes of increasing the demand for the target product, which product should they spend the advertising money on?

How much advertising expense may be justified on each extra product sold as a result of such advertising?

If you are able to increase the selling price on clocks by $1.50/clock, would you make more clocks?

If the prices on radios increase by $1.50/radio, would you make more radios?

The production manager thinks that to increase the production and profit, they should hire more labor. Do you think there is merit in such advice?

The finance manager thinks that to increase the production and profit, they should raise more capital to increase the budget. Do you think there is merit in such advice?