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A brewery produces regular beer and a lower-carbohydrate Tight beer. Steady customers of the brewery buy 12 units of regular beer and 16 units of light beer monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $32,000 and the cost per unit of light beer is $60,000. Every unit of regular beer brings in $100,000 in revenue, while every unit of light beer brings in $300,000 in revenue. The brewery needs at least $9,000,000 in revenue, and has determined that the total demand will be at least 50 units of beer. Complete parts (a) and (b).

A brewery produces regular beer and a lower-carbohydrate Tight beer. Steady customers of the brewery buy 12 units of regular beer and 16 units of light beer monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $32,000 and the cost per unit of light beer is $60,000. Every unit of regular beer brings in $100,000 in revenue, while every unit of light beer brings in $300,000 in revenue. The brewery needs at least $9,000,000 in revenue, and has determined that the total demand will be at least 50 units of beer. Complete parts (a) and (b).

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A brewery produces regular beer and a lower-carbohydrate Tight beer. Steady customers of the brewery buy 12 units of regular beer and 16 units of light beer
monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per
unit of regular beer is $32,000 and the cost per unit of light beer is $60,000. Every unit of regular beer brings in $100,000 in revenue, while every unit of light beer
brings in $300,000 in revenue. The brewery needs at least $9,000,000 in revenue, and has determined that the total demand will be at least 50 units of beer.
Complete parts (a) and (b).
..... (a) How much of each type of beer should be made so as to minimize total production costs? units of regular beer anc (Type integers or decimals.) units of light beer should be made, for a minimum total cost of S (b) Suppose the minimum revenue is increased to $9,300,000. Use shadow costs to calculate the total production cost. The shadow cost of production is5 (Type intogers or decimals ) The increased minimum revenue corresponds to a total production cost of $
Transcribed Image Text:..... (a) How much of each type of beer should be made so as to minimize total production costs? units of regular beer anc (Type integers or decimals.) units of light beer should be made, for a minimum total cost of S (b) Suppose the minimum revenue is increased to $9,300,000. Use shadow costs to calculate the total production cost. The shadow cost of production is5 (Type intogers or decimals ) The increased minimum revenue corresponds to a total production cost of $
A brewery produces regular beer and a lower-carbohydrate "light" beer. Steady customers of the brewery buy 12 units of regular beer and 16 units of light beer monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $32,000 and the cost per unit of light beer is $60,000. Every unit of regular beer brings in $100,000 in revenue, while every unit of light beer brings in $300,000 in revenue. The brewery needs at least $9,000,000 in revenue, and has determined that the total demand will be at least 50 units of beer. Complete parts (a) and (b).
Transcribed Image Text:A brewery produces regular beer and a lower-carbohydrate "light" beer. Steady customers of the brewery buy 12 units of regular beer and 16 units of light beer monthly. While setting up the brewery to produce the beers, the management decides to produce extra beer, beyond that needed to satisfy customers. The cost per unit of regular beer is $32,000 and the cost per unit of light beer is $60,000. Every unit of regular beer brings in $100,000 in revenue, while every unit of light beer brings in $300,000 in revenue. The brewery needs at least $9,000,000 in revenue, and has determined that the total demand will be at least 50 units of beer. Complete parts (a) and (b).
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