JoJo Jeans makes two kinds of jeans, designer and straight-leg. The demand for designer jeans (x1) and straight-leg jeans (x2) are defined by the demand relations:
x1 = 1500 - 24.6p1 and x2 = 2700 - 63.8p2, where p1 and p2 represent the price of each jean type.
The cost of producing designer jeans is $12 per pair, and the cost of producing straight-leg is $9 per pair.
The production of jeans is subject to the following resource constraints for cloth, cutting time, and sewing time in the form:
Cloth 2x1 + 2.7x2 ? 6000 yards
Cutting 3.6x1 + 2.9x2 ? 8500 minutes
Sewing 7.2x1 + 8.5x2 ? 15,000 minutes
10 points - Develop in Excel, and use the Solver tool, the solution to the nonlinear programming problem where the firm would like to maximize the profit across jean types subject to its constraints. Submit your Excel file where you retain the sheet where you develop the model and include the Answer report as a separate sheet.
10 points for the next 4 questions (2.5 each).
What is the maximum profit attainable given the constraints?
What are the values for x1 and x2 at the maximum profit?
What are the values for p1 and p2 at the maximum profit?
Are any of the resource constraints binding?