WOLAYTA SODO UNIVERSITY

SCHOOL OF GRAGUATE STUDIES

MBA PROGRAM

INDIVIDUAL ASSIGNMENT

ON QUANTITATIVE ANALYSIS

BY: GETAHUN TEREFE ID NO. PGR/51023/13

Submitted to:

MENGISTU M. (Assis. Pro)

DAGI furniture and office equipment manufacturing enterprise produces shelves

and dining tables. Each shelf takes 4 hours for fixing work and, 3 hours for

painting. And, each desk requires 2 hours for fixing and 1hour for painting. The

enterprise has a maximum of 240 hours of fixing and 100 hours of painting

available each week. The profit per shelf is birr 7 and per desk is birr 5. In order to

maximize the total weekly profit, the enterprise should decide the amount of

shelves and desks to be produced. How much it should be?

Solution

Shelves Desks max. hours

Fixing hours 4 3 240
Painting hours 2 1 100
Profit 7 5

Let x1 be the number of shelves1 and x2 the number of desks.

The objective function is:

Maximize Z = 7x1 + 5x2

The constraints are: Subject to: 4x1+3x2≤240

2x1+1x2≤100
x1, x2 ≥ 0

1. 4x1+3x2=240 to find the value of x1, let x2 be 0 and vice versa then,
 4x1+3(0) =240 4(0) + 3x2 =240

4x1 = 240 3x2 = 240

4 4 3 3
x1 = 60 x2 = 80

(60, 80)

2. 2x1+1x2 = 100 2x1+1x2 = 100

2x1+1(0) =100 2(0) +1x2= 100

2x1 =100 1x2 = 100
2 2 1 1
x1 = 50 x2 = 100
(50, 100)

Corner point C= 4x1+3x2= 240 2x1+1x2=100

-2 2x1+1x1= 100 2x1+40=100
2x1=100-40

4x1+3x2=240 2x1=60
-4x1-2x2= -200 2 2
1x2=40 x1=30
x2=40 (30,40)

x2
 100

90

80 B(0,80)

70

60

50

40

30 C (30,40)

20

10

0 D(50,0) x1
A(0,0) 10 20 30 40 50 60 70 80

Corner points
A = at (0,0) B = at (0, 80)

C = at (30,40) D = at (50,0)

When we evaluate profit P(x1, x2) at each vertex

A at (0,0) : P(0 , 0) = 0

B at (0,80) : P(0, 80) = 7 (0) +5 (80) = 400

C at (30,40) : P(30,40) = 7 (30) + 5 (40) = 410

D at (50,0): P(50,0) = 7 (50) + 5 (0) = 350

The maximum amount of weekly profit (410) is at vertex D. Hence the enterprise needs

to produce 30 shelves and 40 desks in order to maximize its profit.