Hello mr gromit,can you help me with this particular problem please.
this is the problem-
div 1 produces product A which is transferred to div 2 and also produces product B which can be sold externally or transferred to div 2,
Div 2 uses both products to manufacture product X and Y,
Production of A is restricted to 4000 units due to shortage of labour while production of B is restricted to 6000 units due to a shortage of ingredients.
One unit of X requires 1 unit of A and 2 units of B
One unit of Y requires 2 unit of A and 2 units of B
Details of Costs and revenues -
Div 1- A variable cost =$4
B variable cost= $6, Selling price=$9
Div 2 X variable cost=$7,Selling price=$30
Y variable cost=$5, Selling price=$35
According to the solution given, the maximising function is 3B+7X+10Y where 3 is the contribution of B, 7 for X and 10 for Y.
and the constraints functions are
1X+2Y < or = 4000(labour shortage)
B+2X+2Y< or = 6000(ingredients shortage)
b,x,y> or = 0
My problem is that im struggling to understand the constraints function given in the solution. Could you please explain ? thx
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Transfer pricing + linear programming
sry i forgot to put the question requirement, formulate a linear programming model to determine the optimum production levels and transfer prices.
This one is difficult. I thought linear programming was for situations where we have more than one resource constraints and there are 2 assignments or products. In this case there are 3 products. How can we then plot this on the graph. Really interesting!!!!
Waiting for the solution too
U need a computer software package to solve it because of the 3 variables. I only need help to understand the constraints functions.
11y ago#4Linear programming is not on the P5 syllabus.
(In F5 it never gets beyond 2 variables. For >2 variables you need to use a mathematical technique called simplex).
Where did you find this question?
it is from the p5 bpp textbook(most recent version), it was given as an example. So i guess if it is in the book it could be examinable as bpp is an approved learning partner but i may be wrong.
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