Maximizing Profits

Brett Barratt
Summary
2
A manufacturer produces the following two items: computer desks and
bookcases.

Each item requires processing in each of two departments:
Department A has 55 hours available weekly
Department B has 39 hours available weekly

To manufacture a computer desk requires 4 hours in department A and 3
hours in department B
A bookcase requires 3 hours in department A and 2 hours in department B

Profits on the items are $72 and $23 respectively.

If all the units can be sold, how many of each should be made to maximize
profits?

X will represent the number of computer desks sold, and Y, the number of
bookcases sold.
Linear Programming and Profit Function
3
Linear inequality for the hours used in Department A:
(4 hours per desk and 3 per bookcase cannot exceed 55)
4X+3Y55

Linear inequality for the hours used in Department B:
(3 hours per desk and 2 per bookcase cannot exceed 39)
3X+2Y39

The manufacturer cannot produce negative numbers of items. These
inequalities are as follows:
(The manufacturer cannot produce negative amounts of units)
X0 , Y0

The profit function for the sale of X desks and Y bookcases:
(Profit per week is $72 per desk, $23 per bookcase)
Profit = 72X+23Y

Manufacturing Situation
4
The linear programming problem that describes the
manufacturing situation is:

4X+3Y55
3X+2Y39
X0
Y0

Profit = 72X+23Y

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
-2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
B
o
o
k
c
a
s
e
s

B
u
i
l
t

Desks Built
Production - Linear Programming
Plant A's Production Ability Plant B's Production Ability Restrictions
Graphical Representation
5
The points of intercept are:

1. (0 , 0)

2. (0 , 18.333)

3. (7 , 9)

4. (13 , 0)
1
2
3
4
Maximum Profit Determined
6
From all intersection points, profit is maximized at intercept point 4 (13 , 0).
Bookcases are not as profitable as desks, so it makes sense to focus all production effort on desk
manufacturing. With a100% sales conversion rate week over week, focusing on desks will produce a
weekly profit of $936.00.


Desk Bookcase Profit A Hours B Hours
0 18.33333 421.6667 55 36.66667
1 17 463 55 37
2 15.66667 504.3333 55 37.33333
3 14.33333 545.6667 55 37.66667
4 13 587 55 38
5 11.66667 628.3333 55 38.33333
6 10.33333 669.6667 55 38.66667
7 9 711 55 39
8 7.5 748.5 54.5 39
9 6 786 54 39
10 4.5 823.5 53.5 39
11 3 861 53 39
12 1.5 898.5 52.5 39
13 0 936 52 39
Conclusion - Reflective Writing
7
Math certainly has great application in the real world
and can help in every business decision made.

One precaution that must always be considered is to
really understand the processes and business behind
the math to ensure that all variables are accounted for
in the decision making process.

For example, perhaps the raw materials available
through our supplier would not be sufficient for
production of nothing but desks week over week. If I run
out of stock before my resupply order can be fulfilled
(perhaps a 3-6 week delay), my costs of being out of
business for that time will more than offset any profits
from the previous weeks.

Math is a great tool, but must be used with great care.
Sometimes hasty math can be used to over simply a
process and create greater problems in the long run.