An industrial engineer is tasked to determine the best production rate for a new type of casting in a foundry. After experimenting with many combinations of hourly production rate and total production cost per hour, he summarized his findings as shown in the table below (Table 1). The engineer then talked to the firm’s marketing specialist, who provided these estimates of selling price per casting as a function of production output (Table 2). What production rate would you recommend to maximize total profit? Table1 Total cost/hour $1,000 $2,600 $3,200 $3,900 $4,700 Castings produced/hr 100 200 300 400 500 Table 2 Selling price/casting $20.00 $17.00 $16.00 $15.00 $14.50 Castings produced/hr 100 200 300 400 500
An industrial engineer is tasked to determine the best production rate for a new type of casting in a foundry. After experimenting with many combinations of hourly production rate and total production cost per hour, he summarized his findings as shown in the table below (Table 1). The engineer then talked to the firm’s marketing specialist, who provided these estimates of selling price per casting as a function of production output (Table 2). What production rate would you recommend to maximize total profit?
Table1 Total cost/hour $1,000 $2,600 $3,200 $3,900 $4,700
Castings produced/hr 100 200 300 400 500
Table 2 Selling price/casting $20.00 $17.00 $16.00 $15.00 $14.50
Castings produced/hr 100 200 300 400 500
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