Business Mathematics Assignment 2

Synopsis: The students are required to solve application problem on linear

programming by using SIMPLEX method.
1. A vegetable grower has 80 acres of land which she plans to raise three crops. It
costs RM150 to produce an acre of carrots and the profit is RM40 per acre. It costs
RM160 to produce an acre of celery and the profit is RM50 per acre. Finally, it
costs RM200 to produce an acre of lettuce and the profit is RM60 per acre. Use
the simplex method to find the number of acres of each crop she should plant in
order to maximize her profit. Assume that her cost cannot exceed RM15000.
2. A vegetable grower has 100 acres of land which she plans to raise three crops. It
costs RM120 to produce an acre of carrots and the profit is RM40 per acre. It costs
RM90 to produce an acre of celery and the profit is RM50 per acre. Finally, it costs
RM170 to produce an acre of lettuce and the profit is RM60 per acre. Use the
simplex method to find the number of acres of each crop she should plant in order
to maximize her profit. Assume that her cost cannot exceed RM10000.
3. A vegetable grower has 220 acres of land which she plans to raise three crops. It
costs RM110 to produce an acre of carrots and the profit is RM40 per acre. It costs
RM80 to produce an acre of celery and the profit is RM50 per acre. Finally, it costs
RM180 to produce an acre of lettuce and the profit is RM60 per acre. Use the
simplex method to find the number of acres of each crop she should plant in order
to maximize her profit. Assume that her cost cannot exceed RM20000.
4. A businesswoman can travel to city A, city B or city C. It is 122 miles to city A, 237
miles to city B and 307 miles to city C. She can travel up to 3000 miles. Dining and
other expenses are RM95 in city A, RM130 in city B and RM180 in city C. Her
expenses account allows her to spend RM2000. A trip to city A will generate
RM800 in sales, while trip B will generate RM1300 and a trip C will generate
RM1800. By using the simplex method, how many trips should she makes to each
city to maximize sales?
5. A businesswoman can travel to city A, city B or city C. It is 110 miles to city A, 210
miles to city B and 380 miles to city C. She can travel up to 3500 miles. Dining and
other expenses are RM115 in city A, RM150 in city B and RM130 in city C. Her
expenses account allows her to spend RM2500. A trip to city A will generate
RM800 in sales, while trip B will generate RM1000 and a trip C will generate
RM1400. By using the simplex method, how many trips should she makes to each
city to maximize sales?
6. A knife company sells sets of kitchen knives. The Basic Set consists of 2 utility
knives and 1 chefs knife. The Regular Set consists 2 utility knives and 1 chefs
knife and 1 bread knife. The Deluxe Set consists of 3 utility knives, 1 chefs knife
and 1 bread knife. Their profit is RM30 on a Basic Set, RM40 on a Regular Set
and RM60 on a Deluxe Set. The factory has on hand 800 utility knives, 400 chefs
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knives and 200 bread knives. Assuming all sets are sold, how many set should be
sold to maximize profit? What is the maximum profit?
7. A knife company sells sets of kitchen knives. The Basic Set consists of 2 utility
knives and 1 chefs knife. The Regular Set consists 2 utility knives and 1 chefs
knife and 1 bread knife. The Deluxe Set consists of 3 utility knives, 1 chefs knife
and 1 bread knife. Their profit is RM35 on a Basic Set, RM65 on a Regular Set
and RM75 on a Deluxe Set. The factory has on hand 1000 utility knives, 700 chefs
knives and 300 bread knives. Assuming all sets are sold, how many set should be
sold to maximize profit? What is the maximum profit?
8. A company manufactures three products: X, Y, and Z. Each product requires
machine time and finishing time as shown in the following table:

X
Y
Z

Machine Time
1 hr
2 hr
3 hr

Finishing Time
4 hr
4 hr
8 hr

The number of hours of machine time and finishing time available per month are
900 and 5000, respectively. The unit profit on X, Y and Z is RM6, RM8 and RM12,
respectively. What is the maximum profit per month that can be obtained?
9. A company manufactures three products: X, Y, and Z. Each product requires
machine time and finishing time as shown in the following table:

X
Y
Z

Machine Time
2 hr
2 hr
3 hr

Finishing Time
3 hr
4 hr
8 hr

The number of hours of machine time and finishing time available per month are
1000 and 2000, respectively. The unit profit on X, Y and Z is RM7, RM9 and
RM14, respectively. What is the maximum profit per month that can be obtained?
10. A company manufactures three types of patio furniture: chairs, rockers, and chaise
lounges. Each requires wood, plastic, and aluminium as shown in the following
table:
Chair
Rocker
Chaise lounge

Wood
1 unit
1 unit
1 unit

Plastic
1 unit
1 unit
2 units

Aluminium
2 units
3 units
5 units

The company has available 400 units of wood, 500 units of plastic, and 1450 units
of aluminium. Each chair, rocker, and chaise lounge sells for RM21, RM24 and
RM36, respectively. Assuming that all furniture can be sold, determine a
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production order so that total revenue will be maximum. What is the maximum
revenue?
11. A manufacturer produces three models of bicycles. The times (in hours) required
for assembling, painting, and packaging each model are shown in the table below.
Assembling
Painting
Packaging

Model A
2
1.5
1

Model B
2.5
2
0.75

Model C
3
1
1.25

The total times available for assembling, painting and packaging are 4006 hours,
2495 hours and 1500 hours, respectively. The profits per unit for the three models
are $45 (model A), $50 (model B) and $55 (model C). How many of each type
should be produced to obtain a maximum profit?
12. Suppose that in question 11 the total times available for assembling, painting and
packaging are 4340 hours, 2980 hours and 2010 hours, respectively, and that the
profits per unit are $48 (model A), $50 (model B) and $52 (model C). How many of
each type should be produced to obtain a maximum profit?
13. An investor has up to $250,000 to invest in three types of investments. Type A
pays 8% annually and has a risk factor of 0. Type B pays 10% annually and has a
risk factor of 0.06. Type C pays 14% annually and has a risk factor of 0.10. To
have a well-balanced portfolio, the investor imposes the following conditions. The
average risk factor should be no greater than 0.05. Moreover, at least one-fourth of
the total portfolio is to be allocated to type A investments and at least one-fourth of
the portfolio is to be allocated to type B investments. How much should be
allocated to each type of investment to obtain a maximum return?
14. An investor has up to $450,000 to invest in three types of investments. Type A
pays 6% annually and has a risk factor of 0. Type B pays 10% annually and has a
risk factor of 0.06. Type C pays 12% annually and has a risk factor of 0.08. To
have a well-balanced portfolio, the investor imposes the following conditions. The
average risk factor should be no greater than 0.05. Moreover, at least one-half of
the total portfolio is to be allocated to type A investments and at least one-fourth of
the portfolio is to be allocated to type B investments. How much should be
allocated to each type of investment to obtain a maximum return?
15. An investor has up to $500,000 to invest in three types of investments. Type A
pays 8% annually and has a risk factor of 0. Type B pays 12% annually and has a
risk factor of 0.06. Type C pays 10% annually and has a risk factor of 0.08. To
have a well-balanced portfolio, the investor imposes the following conditions. The
average risk factor should be no greater than 0.05. Moreover, at least 30% of the
total portfolio is to be allocated to type A investments and at least 30% of the
portfolio is to be allocated to type B investments. How much should be allocated to
each type of investment to obtain a maximum return?