Question: Gepbab Production Company uses labor and raw material to produce three products. The resource requirements and sales price for the three products are shown below:

Resource Product 1 Product 2 Product 3

Labor (hours) 3 4 6

Raw material (units) 2 2 5

Sales price ($) 6 8 13

Currently, 60 units of raw material are available. Up to 90 hours of labor can be purchased at $1 per hour. To maximize Gepbab profits, the LP formulation of the Gepbab problem is

max z = 6X1 + 8x2 + 13X3 − L

s.t. 3X1 + 4X2 + 6X3 − L <= 0

2X1 + 2X2 + 5X3 <= 60

L <=90

X1,X2,X3, L>= 0

Here, Xi = units of product i produced, and L = number of labor hours purchased. Its

SOLVER output is

From the SOLVER output:

1. What is the most the company should pay for another unit of raw material?
2. What is the most the company should pay for another hour of labor?
3. What would product 1 have to sell for to make it desirable for the company to produce it?
4. If 100 hours of labor could be persuaded, what would the company’s profit be?
5. Find the new optimal solution if product 3 sold for $15.

NOTE: Please make sure that you justify your answer.

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document