Practice Exercise
CHP 6
Problem 10

Kentwood Electronics manufactures three components for stereo systems: CD players, tape decks, and stereo tuners. The wholesale price and manufacturing cost of each item are:
Component			Wholesale Price			Manufacturing Cost
CD Player			$150						$75
Tape Deck			$85						$35
Stereo Tuner			$70						$30
Each CD player produced requires three hours of assembly; each tape deck requires two hours of assembly; and each tuner requires one hour of assembly. However, the company manufactures these products only in batches of 150—partial batches are not allowed. The marketing department believes that it can sell no more than 150,000 CD Players, 100,000 tape decks, and 90,000 stereo tuners. It expects a demand for at least 50,000 units of each item and wants to be able to meet this demand. If Kenwood has 400,000 hours of assembly time available, how many batches of CD players, tape decks, and stereo tuners should it produce to maximize profits while meeting the minimum demand figures supplied by marketing?   
a.	Formulate an ILP model for this problem. (Hint: Let your decision variables represent the number of batches of each item to produce.)
b.	Create a spreadsheet model for this problem and solve it.
c.	What is the optimal solution?