MIE376 Lec 5 - NLPQPv2.page13

MIE376 Lec 5 - NLPQPv2.page13 - territory 2 sells for $9...

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An example ± A beer company has divided Bloomington into two territories. If x 1 dollars are spent on promotion in territory 1, then 6x 1 1/2 cases of beer can be sold there; and if x 2 dollars are spent on promotion in territory 2, then 4x 2 1/2 cases of beer can be sold there. Each case of beer in territory 1 sells for $10 and incurs $5 in shipping and production costs. Each case of beer in
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Unformatted text preview: territory 2 sells for $9 and incurs $4 in shipping and production costs. A total of $100 is available for promotion. Use a Lagrange Multiplier solution to determine how the beer company can maximize profits. If an extra dollar could be spent on promotion by approximately how much would profits increase? MIE376 - Mathematical Programming 13...
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