You own a small book publishing business and youve just hit a goldmine. Your best friend is a writer, and one of his recent novels has become a bestseller on Amazon Kindle. Your friend gave you the rights to publish and distribute the paperback version of the novel. Four booksellers from Los Angeles, Austin, New Orleans, and Chicago are interested in buying the novel and want 20000 books each. It costs you $5 to produce one paperback, and the booksellers pay you $15.99 per paperback copy. But there is one caveat: you must cover the shipping costs.

You have four shipping partners: Carrier 1, Carrier 2, Carrier 3, and Carrier 4. Their shipping costs per book and their capacities are given in the tables. Note that Carrier 1 does not deliver to Los Angeles, Carrier 2 does not deliver to Austin, Carrier 3 does not deliver to New Orleans, and Carrier 4 does not deliver to Chicago.

Question 1 (8 points). What is the maximum profit you can get from your deal with the four booksellers?

Question 2 (8 points). Carrier 4 calls you and tells that now it can deliver to Chicago at $3.15 per book. This seems interesting, but you know that you will need to pay a $750 flat fee to your lawyer for processing the contract with Carrier 4 for delivery to Chicago. Will it make sense to add Carrier 4s Chicago service to the combination you already have (see Q.1)? Please insert a text box with your arguments for and against adding Carrier 4.

Question 3 (10 points). The situation gets worse: Carrier 1 calls you and tells that all its truck drivers are on strike (i.e., its capacity now is zero). To help you, Carrier 4 has found additional capacity: it can now ship 25000 books and it still can deliver to Chicago at $3.15 per book. Moreover, Carrier 4 says that its own lawyer will be employed for signing the contract (i.e., you dont need to pay the $750 lawyer fee). Without Carrier 1, you cannot fully fulfill the four orders because the total capacity of the three remaining carriers is less than the total demand. Of course, you call Carrier 4 and thankfully accept its offer. But how would this change your maximum profit from the deal with the four booksellers compared to Question 1?

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	Shipping costs per book
	Los Angeles	Austin	New Orleans	Chicago
Carrier 1	0.00	1.50	2.40	3.25
Carrier 2	1.80	1.50	2.50	3.20
Carrier 3	1.90	1.50		3.15
Carrier 4	1.85	1.50	2.45	3.20
Carrier capacity (books)				Book order (quantity of paperbacks required)
Carrier 1	15000			Los Angeles	20000
Carrier 2	25000			Austin	20000
Carrier 3	25000			New Orleans	20000
Carrier 4	15000			Chicago	20000