A Manager Is Applying the Transportation Model of Linear Programming

question 37

Multiple Choice

A manager is applying the transportation model of linear programming to solve an aggregate planning problem. Demand in period 1 is 100 units and in period 2 demand is 150 units. The manager has 125 hours of regular employment available for $10/hour each period. In addition, 50 hours of overtime are available for $15/hour each period. If holding costs are $2 per unit each period, how many hours of regular employment should be used in period 1 (assume demand must be met in both periods 1 and 2 for the lowest possible cost and that production is 1 unit per hour) ?

• A) 100
• B) 125
• C) 150
• D) 50
• E) 175

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Definitions:

Voluntary Contributions

Financial or resource donations given by individuals or entities by choice rather than as a result of taxation or legal obligation.

Public Good

A good that is non-excludable and non-rivalrous, meaning it cannot easily exclude individuals from use, and one individual's consumption does not reduce availability for others.

Radio Broadcasts

The transmission of audio content through radio waves to reach a wide audience.

Clarke Tax Mechanism

A pricing strategy for public goods that charges individuals for the net social cost their consumption imposes on others, aiming to align individual incentives with social welfare.