Delaware Valley Hula Hoops produces four products. Data concerning the selling prices and unit cost of the four products appears below:
|
Selling Price
|
$5
|
$4
|
$9
|
$7
|
|
A
|
B
|
C
|
D
|
|
Variable Costs
|
4
|
3
|
6
|
5
|
|
Machine time
|
4 min.
|
5 min.
|
6 min.
|
3 min.
|
|
Demand per week
|
600 units
|
1,000 units
|
200 units
|
200 units
|
The fixed costs incurred in the factory are $1,000 per year. Demand for the three products exceeds the company's productive capacity. The machine time is the constraint, with only 4,800 minutes of machine time available each week.
Required: Determine the production level of A, B, C and D that will maximize profits.