The Primo Insurance Company is introducing two new product lines: special risk insurance and mortgages. The expected profit is $5 per unit on special risk insurance and $2 per unit on mortgages.

Management wishes to establish sales quotas for the new product lines to maximize total expected profit. The work requirements are as follows:

(a) Formulate a linear programming model for this problem.
(b) Use the graphical method to solve this model.

(c) Verify the exact value of your optimal solution from part (b) by solving algebraically for the simultaneous solution of the relevant two equations.

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Work-Hours per Unit Work-Hours DepartmenSpecial Risk Mortgage Available Underwriting Administration Claims 2 2400 800 1200 0