Cully Furniture buys two products for resale: big shelves (B) and medium shelves (M). Each big shelf costs $500 and requires 100 cubic feet of storage space, and each medium shelf costs $300 and requires 90 cubic feet of storage space. The company has $75,000 to invest in shelves this week, and the warehouse has 18,000 cubic feet available for storage. Profit for each big shelf is $300 and for each medium shelf is $150. In order to maximize profit, how many big shelves (B) and how many medium shelves (M) should be purchased?
A) B = 90, M = 75
B) B = 150, M = 0
C) B = 0, M = 200
D) B = 100, M = 100

Question

Quizplus · Accepted Answer

To maximize profit, Cully Furniture should purchase as many big shelves as possible since the profit per big shelf ($300) is higher than the profit per medium shelf ($150). Given the budget constraint of $75,000 and the cost of each big shelf being $500, the company can purchase a maximum of 150 big shelves ($75,000 / $500 = 150). This purchase uses up the entire budget and requires 15,000 cubic feet of storage space (150 shelves * 100 cubic feet per shelf), which is within the warehouse's capacity of 18,000 cubic feet. Therefore, no medium shelves should be purchased to maximize profit.

Cully Furniture Buys Two Products for Resale: Big Shelves (B)