The logistics/operations manager of a mail order house purchases two products for resale: king beds (K)and queen beds (Q). Each king bed costs $500 and requires 100 cubic feet of storage space, and each queen bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each king bed is $300 and for each queen bed is $150.
For the purchase combination 0 king beds and 200 queen beds, which resource is slack (not fully used)?
A)investment money (only)
B)storage space (only)
C)both investment money and storage space
D)neither investment money nor storage space
E)cannot be determined exactly

Question

Quizplus · Accepted Answer

The cost for 200 queen beds is $60,000, which is less than the $75,000 available, so investment money is slack. The storage space used is 18,000 cubic feet, which exactly matches the available space, so storage space is not slack.

The Logistics/operations Manager of a Mail Order House Purchases Two