Exhibit 81
the Following Questions Pertain to the Problem and Spreadsheet

question 17

Multiple Choice

Exhibit 8.1
The following questions pertain to the problem and spreadsheet below.
A company makes products A and B from 2 resources,labor and material.The company wants to determine the selling price which will maximize profits.A unit of A costs 25 to make and demand is estimated to be 20 ? .10 * Price of A.A unit of B costs 18 to make and demand is estimated to be 30 ? .07 * Price of B.The utilization of labor and materials and the available quantity of resources is shown in the table.A reasonable price for the products is between 100 and 200.
$\begin{array}{lccc}\text { Product } & \text { A } & \text { B } & \text { Avalable resources } \\\hline \text { Labor hr/unit) } & 3 & 2 & 150 \\\text { Material ounces/unit) } & 1 & 2 & 200 \\\text { Manufacturing cost\$/unit) } & 25 & 18 & \\\text { Demand units) } & 20-.10^{*} \mathrm{P}_{1} & 30-.07^{*} \mathrm{P}_{2} &\end{array}$
Let X₁ = demand for As and X₂ = demand for Bs.Let P₁ = price for As and P₂ = price for Bs

-An office supply company is attempting to determine the order quantity for laser printer toner cartridges which are sold to local businesses.Annual demand is 20,000 units and each cartridge costs the store $25.It costs $30 to place an order and the inventory carrying cost rate is 25% of the value of the item.The following spreadsheet has been set up to solve the problem.What constraint would you impose on this problem to ensure that at least one order is placed per year?
$\begin{array}{|c|c|c|}\hline & \text { A } & \text { B } \\\hline 1 & & \\\hline 2 & & \\\hline 3 & \text { Annual Demand: } & 20,000 \\\hline 4 & & \\\hline 5 & \text { Cost per Unit: } & \$ 25\\\hline 6 & \text { Ordering Cost: } & \$ 30 \\\hline 7 & \text { Carrying Cost: } & 25 \%\\\hline 8 & &\\\hline 9 & \text { Order Quantity: } & 483.73 \\ \hline 10 & & \\\hline 11 & \text { Total Cost: } & \$ 502,738.61\\\hline\end{array}$

• A)MAX B9
• B)B9 = 1
• C)B9 ? 1
• D)MIN B11