Management of accounting 3

Chapter 4: Limiting factor analysis

Exercises

1. Find the maximal and minimal value of z = 6x + 9y when the constraint conditions are,
 2x + 3y ≤ 12
 x and y ≥ 0
 x+y≤5
Answer: we find that Z = 6x + 9y is maximum at (0,5) and minimum at (5,0).
2. A company manufactures and sells two types of products and the cost of production of
each unit a and b is $ 200 and $150 respectively each unit of product yields a profit of
$20 and each unit of product b yields a profit of $15 on selling. The company estimates
the monthly demand of A and B to be at a maximum of the harvested unit in all the
production budget for the month is set at $ 50,000. How many units should the
company manufacture to earn maximum profit from its monthly sales from a and b?
Answer: Maximum profit, Z = $230. Number of units of type A is 2 and the number of units of
type B is
3. Maximize Z = 3x + 4y.
Subject to constraints, x + y ≤ 450, 2x + y ≤ 600 and x, y ≤ 0.
Answer: The optimal solution maximum Z = 1800 at co-ordinate x = 0 and y = 450

4. A company makes two products (X and Y) using two machines (A and B). Each unit of
X that is produced requires 50 minutes processing time on machine A and 30 minutes
processing time on machine B. Each unit of Y that is produced requires 24 minutes
processing time on machine A and 33 minutes processing time on machine B. At the start
of the current week there are 30 units of X and 90 units of Y in stock. Available
processing time on machine A is forecast to be 40 hours and on machine B is forecast to
be 35 hours. The demand for X in the current week is forecast to be 75 units and for Y is
forecast to be 95 units. Company policy is to maximize the combined sum of the units of
X and the units of Y in stock at the end of the week.

Required:

 Formulate the problem of deciding how much of each product to make in the current
week as a linear program.
 Solve this linear program graphically.

Answer: we have that x=45 and y=6.25 with the value of the objective function being 1.25