Smith Products Ltd AWhat Is the Equation to Be Maximized?
B

question 7

Essay

Smith Products Ltd.produces two products. The manufacture of these products is partially automated. Total available labour hours are 400, and the total available machine hours are 600. Time requirements and contribution margins per unit for each product are as follows: $\begin{array}{lrr}&\text { Product X } & \text { Product Y } \\\text { Labour hours } & 2 & 3 \\\text { Machine hours } & 4 & 2 \\\text { Contribution margin per unit } & E 5 & £ 4\end{array}$
a.What is the equation to be maximized?
b.What are the equations that express the constraints?
c.What is the greatest number of units of A that can be produced given the constraints?
d.What is the optimal solution?

---

Definitions:

Payment Stream

A sequence of payments made over a period of time as per the terms of a financial agreement.

Payable Today

The total amount that is due and needs to be paid immediately or on the current date.

Short-Term Interest Rate

The interest rate charged on loans or realized on investments over a short period, typically less than a year.

Surplus Funds

Additional money or assets available after all expenses have been accounted for, often used for investment or saving.