Question

batman, Inc. produces and sells two products, L and V.

Revenue and cost information for the two products from last

month appear below:

Product L Product V

selling price per unit ........... $15.00 $12.00

variable costs per unit .......... $ 8.00 $ 7.00

For the coming month, Betty would like to use linear programming

in order to maximize monthly profits.

Each month Betty has 80,000 direct labor hours available and 60,000

machine hours available. Product L requires 5 direct labor hours for

each unit and 2 machine hours for each unit. Product V requires 4

direct labor hours for each unit and 8 machine hours for each unit.

Calculate the number of units of Product L that should be produced

in order to maximize net income.

Answer 1

Let no. of units produced for product L be x and for product V be y.

Therefore, one unit of x needs 5 labour hours and 2 machine hours.

Similarly one unit of y needs 4 labour hours and 8 machine hours.

Hence following linear programming equation will be formed

EQUATION 1 5x + 4y = 80,000

and

EQUATION 2 2x + 8y = 60,000

Solving the second equation, 8y = 60,000-2x

4y= 30,000-x, now putting this value in eq 1

5x + 30,000 - x = 80,000

4x=50,000

we get,

x= 12,500 units

Hence, 12,500 units will be produced of L for maximum profit.

hope you got the answer, please comment for any clarification

Thankyou and all the best for future

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