In reality, Mr. Lock of Neighborhood Hardware has to order three different snowblowers from the same supplier. He tells the analyst, Smith, that he will go along with his normal model (whatever that is!) but, in no event, will he allocate more than $70,000 for the acquisition of snowblowers. In addition to item SB-1, described in Problem 9.3, characteristics of the other two items are:

Demand Unit Acquisition Selling Clearance Standard Item Cost ($/Unit) Price ($/Unit) Price ($/Unit) Mean (Units) Deviation (Units)

SB-2 80 110 70 300 50 SB-3 130 200 120 200 40

a. What should Smith suggest as the order quantities of the three items?

b. What would be the approximate change in expected profit if Lock agreed to a $5,000 increase in the budget allocated for snowblowers?

Note: Assume in this problem that there are no quantity discounts available.? Lp852