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A firm that assembles refrigerators and stoves is about to start production of new models of each. Each model will require assembly time, inspection time, and storage space. The amounts of cach of these resources that can be devoted to the production of the items is limited. The manager of the firm would like to determine the quantity of each item to produce in order to maximize the profit generated by sales. He has the following data at his disposal:

A firm that assembles refrigerators and stoves is about to start production of new models of each. Each model will require assembly time, inspection time, and storage space. The amounts of cach of these resources that can be devoted to the production of the items is limited. The manager of the firm would like to determine the quantity of each item to produce in order to maximize the profit generated by sales. He has the following data at his disposal:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1 •Identify the feasible solution space.
2 •At which point will profit be maximized?

Question A firm that assembles refrigerators and stoves is about to start production of new models of each. Each model will require assembly time, inspection time, and storage space. The amounts of each of these resources that can be devoted to the production of the items is limited. The manager of the firm would like to determine the quantity of each item to produce in order to maximize the profit generated by sales. He has the following data at his disposal: Profit per unit Assembly time per unit Inspection time per unit Storage space per unit Refridgerators Resource Assembly time Inspection time Storage space $60 4 hours 2 hours 3 cubic feet Other information Stoves $50 10 hours 1 hour 3 cubic feet Amount of time available 100 hours 22 hours 39 cubic feet
Transcribed Image Text:Question A firm that assembles refrigerators and stoves is about to start production of new models of each. Each model will require assembly time, inspection time, and storage space. The amounts of each of these resources that can be devoted to the production of the items is limited. The manager of the firm would like to determine the quantity of each item to produce in order to maximize the profit generated by sales. He has the following data at his disposal: Profit per unit Assembly time per unit Inspection time per unit Storage space per unit Refridgerators Resource Assembly time Inspection time Storage space $60 4 hours 2 hours 3 cubic feet Other information Stoves $50 10 hours 1 hour 3 cubic feet Amount of time available 100 hours 22 hours 39 cubic feet
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