Boise Lumber Has Decided to Enter the Lucrative Prefabricated Housing

question 100

Multiple Choice

Boise Lumber has decided to enter the lucrative prefabricated housing business. Initially, it plans to offer three models: standard, deluxe, and luxury. Each house is prefabricated and partially assembled in the factory, and the final assembly is completed on site. The dollar amount of building material required, the amount of labor required in the factory for prefabrication and partial assembly, the amount of on-site labor required, and the profit per unit are as follows: For the first year's production, a sum of $7,200,000 is budgeted for the building material; the number of labor-hours available for work in the factory (for prefabrication and partial assembly) is not to exceed 198,000 hr; and the amount of labor for on-site work is to be less than or equal to 207,000 labor-hours. Determine how many houses of each type Boise should produce (market research has confirmed that there should be no problems with sales) to maximize its profit from this new venture.

• A) 300 houses of Standard Model, 200 houses of Deluxe Model, 200 houses of Luxury Model.
• B) 300 houses of Standard Model, 300 houses of Deluxe Model, 300 houses of Luxury Model.
• C) 200 houses of Standard Model, 300 houses of Deluxe Model, 200 houses of Luxury Model.
• D) 200 houses of Standard Model, 200 houses of Deluxe Model, 300 houses of Luxury Model.
• E) 200 houses of Standard Model, 200 houses of Deluxe Model, 200 houses of Luxury Model.

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