The Elastic Firm Has Two Products Coming on the Market

question 53

Essay

The Elastic Firm has two products coming on the market, Zigs and Zags.To make a Zig, the firm needs 10 units of product A and 15 units of product B.To make a Zag, they need 20 units of product A and 15 units of product B.There are only 2,000 units of product A and 3,000 units of product B available to the firm.The profit on a Zig is $4 and on a Zag it is $6.Management objectives in order of their priority are:
(1)Produce at least 40 Zags.
(2)Achieve a target profit of at least $750.
(3)Use all of the product A available.
(4)Use all of the product B available.
(5)Avoid the requirement for more product A.
Formulate this as a goal programming problem.

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Definitions:

Households

Economic units consisting of all persons who occupy a housing unit, including single families, individuals living alone or with others, but who make joint financial decisions.

Maximize Wealth

The process or strategy aimed at increasing the net value of assets owned by an individual or corporation.

Opportunity Cost

The worth of the best option given up by choosing to follow a specific course of action.

Different Utilities

The concept relating to the varied usefulness or satisfaction that consumers derive from products or services.