Rylon example
Rylon Corporation manufactures Brute and Chanelle perfumes.
- The raw material needed to manufacture each type of perfume can be
purchased for $3 per pound.
- Processing 1 lb. of raw material requires 1 hour of laboratory time.
- Each pound of processed raw material yields 3 oz of Regular Brute Perfume and 4 oz of Regular Chanelle Perfume.
- Regular Brute can be sold for $7/oz.
- Regular Chanelle can be sold for $6/oz.
- Rylon also has the option of further processing Regular Brute
and Regular Chanelle to produce Luxury Brute, sold at $18/oz, and
Luxury Chanelle, sold at $14/oz.
- Each ounce of Regular Brute processed
further requires an additional 3 hours of laboratory time and $4
processing cost and yields 1 oz of Luxury Brute.
- Each ounce of Regular
Chanelle processed further requires an additional 2 hours of
laboratory time and $4 processing cost and yields 1 oz of Luxury
Chanelle.
- Each year, Rylon has 6000 hours of laboratory time available
and can purchase up to 4000 lb. of raw material.
Formulate an LP that
can be used to determine how Rylon can maximize profits. Assume that
the cost of the laboratory hours is a fixed cost.