Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

OFFICE OF THE VICE PRESIDENT FOR CAMPUSES
PUP ALFONSO CAMPUS

BUMA 020 Management Science

Midterm Examination

INSTRUCTIONS: Read the problem carefully. Answer the required questions by selecting the corresponding letter of your
answer in the G-form provided in G-Classroom. Always observe the human’s best policy during the examination. GOOD
LUCK AND GOD BLESS!!! Keep calm and perfect this exam.

1. Refer to the graph, what is the break-even point in units?

A company makes two types of products, X and Y. One unit of Product X requires 5 hours while Product Y requires 4 hours to
produce 1 unit. The company has a total production capacity of 80 hours. The contribution margin of the two products is P20 and
P10 for X and Y, respectively.

2. Identify the mathematical models for the objective function.

3. Which of the following is the controllable input?

4. Based on the data available, how many units of x and y should be produced to maximize profit?

ABC Company manufactures two products, Product X and Product Y, through its production facilities. The contribution
margin for Product X is P15.00 per unit, whereas Product Y’s contribution margin is P25.00. Each product uses Materials A
and B. Product X uses 3 pounds of Material A and Product Y uses 6 pounds. Product X requires 6 feet of Material B and
Product Y uses 4 feet. The company can only purchase 600 pounds of Material A and P880 feet of Material B.

5. The optimal mix of products to manufacture is:

6. Using either the equation or the graphical methods, what is the value of the optimal solution?

7. Using the graphical solution, the extreme points do not include:

Salinas Furniture Company makes two types of sofas, traditional and modern. Because of their different types of construction,
they require different amounts of machine time and skilled labor time. The company has available, per week, 1,000 hours of
skilled labor and 1, 200 hours of machine time. The variable costs associated with skilled labor, including both wages and variable
overhead, are P7 per hour; for machine time, the variable costs are P6 per hour. The firm can sell all of the modern sofas it can
make, but only 200 traditional sofas per week.

Additional data on the two sofas are as follows:

Traditional Modern
Selling Price P240 P180
Materials costs (the only other variable cost) 80 60
Labor hours required, per unit 4 2
Machine Hours required, per unit 3 4

8. Use ‘x’ for Traditional and ‘y’ for Modern. Which equation best represents the objective function for the types of sofas of
Salinas?

9. Referring to Salinas and using the graphical and equation methods, what is the optimal solution for the two sofas?

1 | REDGUIA
 Republic of the Philippines
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
OFFICE OF THE VICE PRESIDENT FOR CAMPUSES
PUP MARAGONDON CAMPUS

10. Using the optimal solution in the previous question, how much is the total profit of Salinas Furniture?

11. Suppose that a price reduction of a Traditional sofa has reduced its contribution margin to P100 per unit. Does the optimal
solution change? How much is the new profit?

12. Suppose that a price reduction of a Traditional sofa has reduced its contribution margin to P75 per unit. Does the optimal
solution change? How much is the new profit?

2 | REDGUIA BUMA020 Management Science