Tieton Ltd. has two departments, Fabrication and Assembly. They produce 2 products. Product T needs 6 hours in fabrication and 6 hours in assembly. Product S needs 2 hours in fabrication and 4 hours in assembly. Fabrication has 24 hours available and Assembly 18. Total variable costs are $ 20 and $15 for T and S respectively. T sells for $22 and S for $16. The objective function to maximise Tieton's profits is
A) MAX$22T+ $16S
B) MAX$20T+ $15S
C) MAX$1T + $2S
D) MAX$2T + $1S

Question

Quizplus · Accepted Answer

The profit per unit for T is $2 ($22 - $20) and for S is $1 ($16 - $15). The objective function to maximize profit is therefore MAX $2T + $1S.