Answer to Question #263352 in Microeconomics for Shivendra

Question

The table below summarises the parameters of the problems.

Hours per Unit

Department Chairs Desks Tables Hours

Available

Fabrication 4 6 2 1,850

Assembly 3 5 7 2,400

Shipping 3 2 4 1,500

Demand

Potential 360 300 100

Profit $15 $24 $18

Q1: Using a spreadsheet model, determine the optimal solution that will generate

maximum profits from current production. [10 marks]

Q2: From your answers in (ii), you realise that fabrication time limits your ability to

increase profits. Maybe we should acquire more of it. How much should we pay for

additional time? [10 marks]

Answer 1

a.

b.

Number of Chairs =0

Number of Desks=275

Number of Tables=100

Maximum profit=$8,400