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Determine how many units of each product should be produced

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Question

A firm manufactures two products, A and B. There is only one machine with 3000 hours available per year. Each unit of product A requires 3 machine hours while each unit of Product B requires 2 machine hours. A summary of the profitability of each product is provided below.

Product A Product B

selling price $150 $120

Costs:

DM $60 $15

DL $15 $25

VMOH $15 $20

Maximum yearly demand for Products A is 800 units and for Product B is 1000 units.

Required:

Determine how many units of each product should be produced to maximise yearly profit.

Reference no: EM132405384

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