A manufacturing firm has discontinued the production of a certain unprofitable product line. This has created considerable excess production capacity. Management is considering devoting this excess capacity to one or more of three products. The available capacity on the machines that might limit output is summarized below: Machine type Available time (Machine hours/week) Milling m/c 500 Lathe 350 Grinder 150 The number of machine hours required for each unit of the respective products is Machine type Product 1 Product 2 Product 3 Milling m/c 9 3 5 Lathe 5 4 0 Grinder 3 0 2 The Sales Department indicates that the sales potential for products 1 and 2 exceeds the maximum production rate and that the sales potential for product 3 is 20 units per week. The unit profit would be $50, $20 and $25 respectively, on products 1, 2 and 3. The objective is to determine how much of each product the firm should produce to maximize profit.
