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Problem 22222

On January 1, 2011, Dean Company purchased ten-year bonds with a face value of ₱1,000,000 and a stated interest rate of 8% per year payable semiannually July 1 and January 1. The bonds were acquired to yield 10%. Present value factors are as follows

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Isabelle Candelaria
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508 views3 pages

Problem 22222

On January 1, 2011, Dean Company purchased ten-year bonds with a face value of ₱1,000,000 and a stated interest rate of 8% per year payable semiannually July 1 and January 1. The bonds were acquired to yield 10%. Present value factors are as follows

Uploaded by

Isabelle Candelaria
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PROBLEM 2:

A manufacturer produces bicycles and motorcycles, each of  which must be


processed through two machine centers.  Machine Center 1 has a maximum of 120
hours availability and  Machine Center 2 has a maximum of 180
hours availability. A  bicycle requires six (6) hours in Machine Center 1 and three (3) 
hours in Machine Center  2. Manufacturing a motorcycle  requires
four (4) hours in Machine Center 1 and 10 hours in  Machine Center 2. If the profit is
P450 for each bicycle and  P2,500 for a motorcycle, determine the number of bicycles
and  the number
of motorcycles to produce to maximize the profit,  considering that the number of motor
cycles must not exceed 12  units and bicycles must be at least 10 units.

ANSWER-SOLUTION TO PROBLEM 2:

Let x = number of bicycles to produce to maximize the profit

Let y = number of motorcycles to produce to maximize the profit

Machine Center 1 Machine Center 2 Profit

Bicycles 6 3 450

Motorcycles 4 10 2500

Objective function :

Maximize P=450x+2500y 

Subject to:

6x+4y<=120                
3x+10y<=180              
x>=10                         
y<=12                          
y>=0                           

Reformulate :

6x+4y+S1+0S2 = 120 
3x+10y+0S1+S2 = 180
Decision:

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