An Objective Function Reflects the Relevant Cost of Labor Hours

question 19

Multiple Choice

An objective function reflects the relevant cost of labor hours used in production rather than treating them as a sunk cost.The correct interpretation of the dual price associated with the labor hours constraint is the

• A)maximum premium (say for overtime)over the normal price that the company would be willing to pay.
• B)upper limit on the total hourly wage the company would pay.
• C)reduction in hours that could be sustained before the solution would change.
• D)number of hours by which the right-hand side can change before there is a change in the solution point.

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