BU275 Midterm: Midterm 2 Review
Document Summary
Determine decision variables (equations representing level of activity in firm) Determine objective function (profit accrued by combination of decisions) [(profit/dv1)*(dv1)] + [(profit/dv2)*(dv2)] = z a: change = changed profit from slope b. i. X2 = (z/x2 coefficient) (x1with coefficient/x2 coeff) c. If given cost, when trying to maximize profit, take cots off the profit before the function is made. Determine constraints (given information: amount of resource used per dv > , demand is a vertical constraint, dv1, dv2 > 0 d. If given a % constraint, still find the intercepts, and pick a point in space to go to d. i. e. f. g. One more than the other = (larger smaller) > amount more (is an upward slope) Defect = (100% - defect) + d2 = total goods needed times as many as other=needing # times>other(#) Make one variable 0 to find intersections: shade feasible area based on constraint b. i.
