Reference no: EM132693960
Furnco makes handcrafted dining room tables and chairs. Each table and chair is made entirely out of either pine, oak or cherry. A Furnco table requires 180 board feet of pine, 160 board feet of oak or 150 board feet of cherry. Their chairs use 15 board feet of pine, 12 board feet of oak or 10 board feet of cherry. Furnco can purchase pine for $0.20 / board foot, oak for $0.60 / board foot and cherry for $1.50 / board foot and their budget allows them to spend up to $33,600 each week on wood to produce furniture. Profits for each item produced by Furnco are given in the table below:
Profit per Unit
Pine
Oak
Cherry
Table
100
150
180
Chair
50
75
90
Total maximum demands for tables and chairs (all wood types combined) converted to a weekly basis are 240 tables and 750 chairs.
Formulate a Linear Program to determine how many tables and chairs of each type Furnco should produce to maximize their weekly profit.
Solve the problem using Excel. (Use the solution to answer each question below.)
(a) Interpret the solution.
(b) What is the shadow price (labeled in appropriate units) for an additional unit of weekly chair demand at Furnco?
(c) Calculate Furnco's revised maximum profit if the company were forced to decrease their weekly budget by $10,000?