Answer to Question #171852 in Accounting for john

Question

A competitor has used a linear programming model and formulated the following objective function:

C = 4X + 2Y

The optimal solution has determined that 400 X and 600 Y should be produced. An extra litre of material would however change this to 400.5 X and 599.5 Y. Materials cost £9 per litre.

Answer 1

For an additional one, you need to spend material X more by 0.5 ,and material Y less by 0.5.

If X=9, Y=10 at prices, then we will spend 4.5 X and 5.5 Y per liter