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Optimal Solution for Product Cost

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I'm looking to understand how to determine the optimization for the following problem.

Part One: What is the optimal solution for this problem?

M&D Chemicals produces two products that are sold as raw materials to companies manufacturing bath soaps and laundry detergents. Based on an analysis of current inventory levels and potential demand for the coming month, M&D's management has specified that the combined production for products A and B must total at least 350 gallons. Separately, a major customer's order for 125 gallons of product A must also be satisfied. Product A requires 2 hours of processing time per gallon while product B requires 1 hour of processing time per gallon, and for the coming month, 600 hours of processing time are available. M&D's objective is to satisfy these requirements at a minimum total production cost. Production costs are $2 per gallon for product A and $3 per gallon for product B.

Part Two:
Now assume that the cost per gallon for Product A is increased to $3 per gallon.

What is the optimal solution for this problem?

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M&D Chemicals produces two products that are sold as raw materials to companies manufacturing bath soaps and laundry detergents. Based on an analysis of current inventory levels and potential demand for the coming month, M&D's management has specified that the combined production for ...

Solution Summary

The optimal solution for product costs are examined.

$2.19
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Problem 3
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Problem 4
Seward Company buys 35,000 lb of flour annually. The cost of placing an order is estimated to be $35, and its cost of capital is 12%. The storage and handling costs are estimated to be 2 cents per lb annually, at the average inventory level. The price of flour is as follows: up to a 1000 lbs at 12¢ per lb, 1,000 to 4999 lbs at 11¢ per lb, and 5,000 lbs and over at 10¢ per lb. Find the optimal order quantity of flour for Seward.

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