A Company Is Developing a Linear Programming Model for Its

question 84

Multiple Choice

A company is developing a linear programming model for its aggregate production plan. If I_t = units in inventory at the end of period t, P_t = units produced in period t, and D_t = demand in period t, then the company's demand constraint to ensure that demand is met in quarter 2 is

• A) D₂ = I₂ - I₁ + P₂.
• B) D₂ = I₁ + P₂.
• C) D₂ = I₂ + I₁ + P₂.
• D) D₂ = I₁ + P₂ - I₂.

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Definitions:

Price Fall

A reduction in the market price of a good or service, which can influence consumer behavior and economic conditions.

Demand Function

A mathematical expression that shows the relationship between the quantity demanded of a good and its price, holding other factors constant.

Elasticity

A measure of how much the quantity demanded or supplied of a good responds to a change in price or other economic variables.

Elasticity of Demand

Quantifies the change in demand for a commodity in response to its price movements.