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 prod uct lines to maximize total expected profit. The work requirements are as follows: Department Work-Hours per Unit Work-Hours Available Special Risk Mortgage Underwriting 3 2 2400 Administration 1 800 Claims 2 1200 Formulate a linear programming model for this problem and use the graphical method to solve this model.

interpret Company A and Company B's results below in terms of the factors that impact Cost Volume Profit Analysis (CVP). Why does Company B have the greater degree of operating leverage? As a manager, why is operating leverage an important concept? Company  A       Company  B   Sales  (10,000 units times $26) $260,000     Sales (10,000 units times $32) $320,000 Less Variable expenses (10,000 units $16)   160,000     Less Variable expenses (10,000 units times $20)   200,000 Contribution margin (a)   100,000     Contribution margin (a)    120,000 Less Fixed expenses     80,000     Less Fixed expenses    100,000 Net operating income (b)     20,000     Net operating income (b)      20,000             Degree of operating leverage (a divided by b)       5.0     Degree of operating leverage (a divided by b)        6.0

Perth Mining Company operates two mines for the purpose of extracting gold and silver. The Saddle Mine costs $30,000/day to operate, and it yields 50 oz of gold and 3000 oz of silver each of a day The Horseshoe Mine costs $16,000/day to operate, and it yields 75 oz of gold and 1000 oz of silver each of y day. Company management has set a target of at least 650 oz of gold and 18,000 of silver. (a) How many days should each mine be operated so that the target can be met at a minimum cost? The minimum is C - 288000 at (x,y)-(0,18 (b) Suppose C cx + 16,000y. Find the range of values that the Saddle Mine's daily operating cost, the coefficient c of x, can assume without changing the optimal auton SCS (c) Find the range of values that the requirement for gold can assume. s (requirement for gold) s (d) Find the shadow price for the requirement for gold. (Round your answer to the nearest cent.) S

An Investec analyst is looking to invest R180,000 in hopes of getting the highest return possible. There are four investment options available: bonds, mutual funds, stocks, or a savings account yielding interest. The bonds give a 4% annual return, mutual funds give an 9% return, stocks give a 12% return, and the savings account gives a 3% return with all investments being subject to risk. To control for risk, the following constraints are put into place: a) No more than 12% of the total investment can be put into stocks. b) At most 30% must be invested in mutual funds and/or the savings account. c) The amount put in the bonds must be no more than the amount put into the other investments combined. d) The ratio of money invested in mutual funds to the amount invested in stocks and the savings account should be at least 2 to 1. e) All the R180,000 must be invested and no shorting is allowed. Formulate a linear programming model for this problem to get the highest return (i.e., Define…