Reference no: EM132566835

AA Company manufactures two types of products; S and Y. Each package of S contains 4 kg of C and 6 kg of M; each package of Y contains 6 kg of C and 3 kg of M. AA believes it can sell as much of each product as it can make. S sells for ETB 3.6 per package and Y sell for ETB 4 per package. AA's production is limited in several ways. First, AA can buy only up to 800,000 kg of C each month at ETB 0.80 per kg. It can buy only up to 600,000 kgs of M per month at ETB 1 per Kg. Besides, a special piece of machinery is required to make S, and this machine has a capacity of 140,000 packages per month. The variable cost of blending and packing the product is ETB 0.5 per package for S and ETB 0.40 per package for Y.

Required:

Question 1: Suppose your bonus is based on the company profit, so you try to maximize its profit. How should you operate the company to maximize its profit and your bonus? (write the objective function and show the optimization process clearly and comment on the optimization technique used).