COMM 163 Lecture Notes - Shadow Price, Models 1, Carrying Cost

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Allowable increase is 3. 333 so you can apply concept of shadow price. Profit will increase by the shadow price * 2, profit will increase by 2. 85*2 =~5, which is less than . No, because the allowable increase for assembly. Cannot analyze what happens with 3 more hours because allowable increase is 2. 5. But what happens with 2. 5 more grinder hours. Profit will increase by 2. 5*67 = ; thus you should get the 3 grinder hours, because with. 3 hours we can do at least as good as with 2. 5 hours, so yes we will purchase the 3 hours. Product mix lp models: start with picture company with limited resources is trying to maximize profits by running 2 process, they make 2 drugs. Drug 1: rive x, drug 2: drumad, 3rd drug is mix of both: duovir. Decisions: x (process 1), y (process 2), z (combining process to make duovir.

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