Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
12th Edition
ISBN: 9781259580093
Author: William J Stevenson
Publisher: McGraw-Hill Education
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Chapter 19, Problem 5DRQ
Summary Introduction

To determine: What sliding an objective function line towards and away from the origin means.

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XYZ Corporation manufactures two products, Simple and Complex.  The following annual information was gathered:                                          Simple   Complex Selling price per unit         P47.00  P26.00 Variable cost per unit        42.00    22.00 Total annual fixed costs are P18,000.  Assume XYZ Corporation can produce and sell any mix of Simple or Complex at full capacity.  It takes 1.5 hours to make one unit of Complex.  However, Simple takes 50% longer to manufacture when compared to Complex.  Only 120,000 hours of plant capacity are available.  How many units of Simple and Complex should XYZ Corporation produce and sell in a year to maximize profits?
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