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22 April, 20:30

The logistics/operations manager of a mail order house purchases two products for resale: King Beds (K) and Queen Beds (Q). Each King Bed costs $500 and requires 100 cubic feet of storage space, and each Queen Bed costs $300 and requires 90 cubic feet of storage space. The manager has $75,000 to invest in beds this week, and her warehouse has 18,000 cubic feet available for storage. Profit for each King Bed is $300, and for each Queen Bed is $150. 18) What is the objective function

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  1. 22 April, 20:48
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    Profit Function = (300 x king size bed) + (150 x queen size bed)

    Explanation:

    Objective Function is the function which needs to be optimised, i. e maximised or minimised. The function shows the objective variable as a dependent variable, determined by independent / explanatory variable (s).

    Given Case : The manager would tend to maximise profit function.

    Total Profit = Per unit profit x quantity

    So, Profit Function: by per unit profit & sale quantities:

    = (300 x king size bed) + (150 x queen size bed)

    This profit objective function would be maximised, to find the profit maximising sale quantities of king & queen size beds.

    Space, Budget would be the constraints to this optimisation.
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