The ABC Company makes two products that can be produced on two different production lines. Both products have their lowest production costs when produced on the more modern of the two production lines. However, the modern production line does not have the capacity to handle the minimum production requirement. As a result, some production will have to be routed to the older production line. The following data show the production requirements, production line capacities, and production costs: Production cost/unit Old Modern Minimum Production Product Line Line requirements 1 P3.00 P5.00 500 units 2 P 2.50 P 4.00 700 units Production Line Capacities 800 600 How many units of product 2 is the maximum production requirement wherein the shadow price is yalid?

The ABC Company makes two products that can be produced on two different production lines. Both products have their lowest production costs when produced on the more modern of the two production lines. However, the modern production line does not have the capacity to handle the minimum production requirement. As a result, some production will have to be routed to the older production line. The following data show the production requirements, production line capacities, and production costs: Production cost/unit Old Modern Minimum Production Product Line Line requirements 1 P3.00 P5.00 500 units 2 P 2.50 P 4.00 700 units Production Line Capacities 800 600 How many units of product 2 is the maximum production requirement wherein the shadow price is yalid?

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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