A Chicago manufacturer of office equipment is desperately attempting to control its profit and…

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A Chicago manufacturer of office equipment is desperately attempting to control its profit and loss statement. The company currently manufactures 15 different products, each coded with a one-letter and three-digit designation.

  1. How many of each of the 15 products should be produced each month?

  2. Clearly explain the meaning of each shadow price.

  3. A number of workers interested in saving money for the holidays have offered to work overtime next month at a rate of $12.50 per hour. What should the response of management be?

  4. Two tons (of steel alloy are available from an overstocked supplier at a total cost of $8,000. Should the steel be purchased? All or part of the supply?

  5. The accountants have just discovered that an error was made in the contribution to profit for product N150. The correct value is actually $8.88. What are the implications of this error?

  6. Management is considering the abandonment of five product lines (those beginning with the letters A through E). If no minimum monthly demand is established, what are the implications? Note that there already is no minimum for two of these products. Use the corrected value for N150 (X1- X4 = 0)

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