Use the Table Below to Answer the Following Question(s) Use a Linear Optimization Model Based on the Data to Luthiers

question 16

Multiple Choice

Use the table below to answer the following question(s) .
Pickson Luthiers Corporation makes four models of electric guitars, ScarCT, Dela Mort, Warax, and Invazen. Each guitar must flow through five departments, assembly, painting, sound testing, inspection, and packaging. The table below shows the relevant data. Production rates are shown in units/hour. (ScarCT is assembled elsewhere) . Pickson wants to determine how many guitars to make to maximize monthly profit. $\begin{array}{|l|l|l|l|l|l|}\hline \begin{array}{l}\text { Pickson Luthiers } \\\text { Corporation }\end{array} & & & & & \\\hline & & & & & \\\hline \text { Data } & & & & & \\\hline \text { Guitar Model } & \begin{array}{l}\text { Selling } \\\text { price/Unit }\end{array} & \begin{array}{l}\text { Variable } \\\text { cost/Unit }\end{array} & \text { Min Sales } & \text { Max Sales } \\\hline \text { ScarCT } & 750.00 & 660.00 & 0 & 2500 \\\hline \text { Dela Mort } & 788.00 & 680.00 & 0 & 2000 \\\hline \text { Warax } & 800.00 & 700.00 & 100 & 1000 \\\hline \text { Invazen } & 850.00 & 800.00 & 80 & 500 \\ \hline & & & & \\\hline \begin{array}{l}\text { Production rates } \\\text { (units/hour) }\end{array} & \text { ScarCT } & \text { Dela Mort } & \text { Warax } & \text { Invazen } & \text { Hours } \\&&&&&\text { Available } \\\hline \text { Assembly } & - & 35 & 25 & 20 & 220 \\\hline \text { Painting } & 35 & 20 & 15 & 10 & 220 \\\hline \text { Sound Testing } & 20 & 10 & 20 & 18 & 220 \\\hline \text { Inspection } & 10 & 12 & 8 & 5 & 220 \\\hline \text { Packaging } & 9 & 10 & 5 & 8 & 220 \\\hline\end{array}$ Use a linear optimization model based on the data to answer the following question.
-According to the linear optimization model, what is the total number of ScarCTs produced?

• A) 2500
• B) 750
• C) 0
• D) 100

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Definitions:

Compounded Monthly

A method of calculating interest in which the interest earned each month is added to the principal, and the following month's interest is calculated on the new total.

Perpetuity

A financial instrument that pays a fixed amount of cash flow indefinitely.

Compounded Annually

Involves the calculation and addition of interest to the principal sum of a loan or deposit once every year.

Compounded Quarterly

A method where interest is added to the principal every three months which allows interest to be earned on the previously accumulated interest.