The company has two factories that are capable of producing these toys. However, to avoid doubling the start-up costs, just one factory would be used, where the choice would be based on maximizing profit. For administrative reasons, the same factory would be used for both new toys if both are produced.
Toy 1 can be produced at the rate of 50 per hour in factory 1 and 40 per hour in factory 2. Toy 2 can be produced at the rate of 40 per hour in factory 1 and 25 per hour in factory 2. Factories 1 and 2, respectively, have 500 hours and 700 hours of production time available before Christmas that could be used to produce these toys.
It is not known whether these two toys would be continued after Christmas. Therefore, the problem is to determine how many units (if any) of each new toy should be produced before Christmas to maximize the total profit.
This question was asked on Nov 13, 2011.
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