A company manufactures two products. If it charges aprice pi for product i, it can sell qi units of product i, whereq1 60 3p1 p2 and q2 80 2p2 p1. It costs $25to produce a unit of product 1 and $72 to produce a unit ofproduct 2. How many units of each product should beproduced to maximize profits?

A company manufactures two products. If it charges aprice pi for product i, it can sell qi units of product i, whereq1 60 3p1 p2 and q2 80 2p2 p1. It costs $25to produce a unit of product 1 and $72 to produce a unit ofproduct 2. How many units of each product should beproduced to maximize profits?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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Concept explainers

Optimization Models

Optimization models are mathematical models that help organizations determine the best way to allocate scarce resources to achieve specific objectives. These models can be used to solve a wide variety of problems, from finding the most efficient route for a delivery truck to determining the optimal mix of products to stock in a store.

Question

A company manufactures two products. If it charges a
price pi for product i, it can sell qi units of product i, where
q1 60 3p1

p2 and q2 80 2p2

p1. It costs $25
to produce a unit of product 1 and $72 to produce a unit of
product 2. How many units of each product should be
produced to maximize profits?

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