Constrained optimization-one internal binding constraint

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Reference no: EM131994182

Constrained Optimization: One Internal Binding Constraint

Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins of $500 and $1,000, respectively. Assume initially that Patz can sell all that is produced of either component. Part A requires two hours of assembly, and B requires five hours of assembly. The firm has 500 assembly hours per week.

Required:

1. Express the objective of maximizing the total contribution margin subject to the assembly-hour constraint.

Objective function: Max Z = $500 A + $1,000 B

Subject to: A + B ≤

2. Identify the optimal amount that should be produced of each machine part. If none of the components should be produced, enter "0" for your answer.

Component A units

Component B units

Identify the total contribution margin associated with this mix. $

3. What if market conditions are such that Patz can sell at most 125 units of Part A and 100 units of Part B? Express the objective function with its associated constraints for this case.

Objective function: Max Z = $500 A + $1,000 B

Assembly-hour constraint A + B ≤

Demand constraint for Part A A ≤

Demand constraint for Part B B ≤

Identify the optimal mix and its associated total contribution margin. $

Reference no: EM131994182

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