Pinter Corp.produces three products,and is currently short on machine hours since one of its two machines is down - only 360 hours are available this month.The selling price,costs,labor requirements,and demand of the three products are as follows: How many of each product should be sold while the machine is down to maximize profit?
A)200 of Product A,0 of Product B,and 210 of Product C.
B)0 of Product A,1,440 of Product B,and 0 of Product C.
C)66 of Product A,400 of Product B,and 210 of Product C.
D)300 of Product A,400 of Product B,and 210 of Product C.

Question

Pinter Corp.produces three products,and is currently short on machine hours since one of its two machines is down - only 360 hours are available this month.The selling price,costs,labor requirements,and demand of the three products are as follows:  How many of each product should be sold while the machine is down to maximize profit?
A)200 of Product A,0 of Product B,and 210 of Product C. 
B)0 of Product A,1,440 of Product B,and 0 of Product C. 
C)66 of Product A,400 of Product B,and 210 of Product C. 
D)300 of Product A,400 of Product B,and 210 of Product C.

Quizplus · Accepted Answer

To maximize profit while the machine is down, we need to determine the contribution margin per machine hour for each product. This is calculated as (selling price - variable cost) / labor requirement per unit.

Product A: (120-70)/2 = $25 per machine hour 
Product B: (90-50)/1 = $40 per machine hour 
Product C: (60-30)/0.5 = $60 per machine hour

Using this information, we can set up the following linear programming model:

Maximize 25A + 40B + 60C 
Subject to: 
2A + B + 0.5C <= 360 (machine hours constraint) 
A >= 0, B >= 0, C >= 0 (non-negativity constraints)

Solving this model, we get the solution: 
A = 66 
B = 400 
C = 210

Therefore, the best choice is C: 66 of Product A, 400 of Product B, and 210 of Product C should be sold while the machine is down to maximize profit.