- This topic has 1 reply, 2 voices, and was last updated 7 years ago by .
- You must be logged in to reply to this topic.
PQ Awards Nominations
Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Linear programming….kindly assist me with the working for this question
A company currently makes 2 products X and Y. both use material z which is limited supply and current production levels using the entire weekly supply. product X uses 5kg of Z per unit, product Y uses 5kg of Z per unit. Material Z is costing currently $3/kg and the shadow price for material Z has been calculated as $3.7/kg.
The supplier of material Z is prepared to increase the weekly supply by 10kg.
What is the extra amount that the company should prepare to pay for the extra material?
I really do suggest that you watch our free lectures on linear programming!!
The shadow price is the most extra that will be paid (above the normal cost).
Therefore the most per kg that they are prepared to pay for Z is 3 + 3.70 = $6.70 per kg.