Considering an expansion of production

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Reference no: EM13966314

BagCo produces leather jackets and handbags. A jacket requires a 8 m^2 of leather, and a handbag only 2 m^2. The labor requirements for the two products are 12 and 5 hours, respectively. The current weekly supplies of leather and labor are limited to 1200m^2 and 1850 hours. The company sells the jackets and handbags at $350 and $120, respectively. The objective is to determine the production schedule that maximizes the net revenue.

(a) Determine the optimum solution

(b) BagCo is considering an expansion of production. What is the maximum purchase price the company should pay for additional leather? For additional labor?

Reference no: EM13966314

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