Assume a steady state operation

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Selecting the right product mix: a factory has 3 machines (M1, M2 and M3) and it manufactures two products (P and Q). The demand for both the products is far greater than the capacity of the factory:

Market price for P is $30 per unit, and $40 per unit for Q

Raw Material cost of P is $5 per unit, and $10 per unit for Q

Making one unit of P takes 20 minutes on M1, 20 minutes on M2 and 30 minutes on M3. Making one unit of Q takes 15 minutes on M1, 15 minutes on M2 and 30 minutes on M3.

The factory works 8 hours a day, 5 days a week.

It costs $100 per day to run the factory (including wages, rent, utilities etc).

Assume a steady state operation.

Reference no: EM13336073

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