Reference no: EM132926055

Question - The manufacturers of Zing golf clubs produce two models of clubs. Their Budget set of clubs sells for $320, and the better quality Greenmaster set sells for $600. The company wishes to maximise sales revenue from the next production run, but this can only be done under the following conditions:

The company can only afford up to 1':';00 labour hours for production. Each Budget set uses 30 hours and each Greenmaster set uses 50 hours of labour.

There are already orders for 10 sets of Budget clubs which must be filled in the next production run.

Material costs must be no more than $3,000. Each Budget set uses a total of $100 worth of materials and each Greenmaster set uses a total of $150.

Sales representatives believe that it is unlikely that more more than 25 Greenmaster sets can be sold to retailers out of the next batch as current sales of this model are slow.

It is possible to produce partial sets. All clubs must be sold.

(i) Set up the objective function and constraints for this problem, clearly identifying the variables used.

(ii) Draw a graph with Budget sets on the horizontal axis. Mark the feasible region clearly. Your diagram should include one iso-objective line.

(iii) What is the optimal level of sales and how many of each set will give this level?

(iv) If the price of the Budget set of clubs were $400 (instead of $320), would you find any change to your answer in part (c)? Give a full explanation of any differences.