The Dolls-R-Us Corporation is a large retail chain specializing in dolls and oth

Question

The Dolls-R-Us Corporation is a large retail chain specializing in dolls and other accessories. It is trying to find out the best mix of products (i.e. the mix that will maximize profits) for a new store it is building in a new shopping mall. It is particularly concerned about a specific line of products based upon the infamous PBS show, The Magic Couch, starring Molly and Lunette. It has an outstanding order of 2000 Molly dolls from the Dolly Company, at a cost of $ 12.00 per doll. It also has an order for 1500 Lunette dolls from the Mattel Corporation, at a cost of $ 15.00 per doll. Finally, it purchases miniature “magic” couches for $ 20.00 from the Broyhill Corporation. Dolls-R-Us sells the Molly dolls for $ 25.00, the Lunette dolls for $ 20.00 and the couches for $50.00. The PBS licensing agreement specifies that the retailer must purchase a minimum of one couch for every five (5) Molly dolls. Dolls-R-Us estimates that the maximum number of Lunette dolls it can sell is 400. Given that the manager in charge of this line of products has a purchasing budget of $ 75,000, how many of each product should she purchase? This does not need to be answered. The two parts below need to be.

What is her objective function?

(a) Max 13X1 + 5X2 + 30X3

(b) Min 12X1 + 15X2 + 20X3

(c) Max 25X1 + 20X2 + 50X3

(d) Min 12X1 + 15X2 + 20X3 75000

(e) Max X1 + X2 + X3

What is the equation that reflects the constraint imposed by the PBS franchise agreement?

(a) X1 5X3

(b) X1 5X3 0

(c) 5X1 X3

(d) 5X1 X3 0

(e) 0.20X1 X3 0

Explanation / Answer

What is her objective function? ....... Select - Option (a) Max 13X1 + 5X2 + 30X3

Thus, our objective is to maximize the profits.......... so

Max 13X1 + 5X2 + 30X3

Question - 2

What is the equation that reflects the constraint imposed by the PBS franchise agreement?

Select .............. Option - e    0.20X1 X3 0

As per the agreement, there must be one X3 for every 5 X1, which means that .......

X1 / 5   X3

X1 5 X3

X1 - 5 X3 0

Dividing the whole equation with 5

0.20 X1 - X3 0

Above solution will surely helpyou. ............ Kindly rate my answer

Molly Lunette Couches Selling Price 25 20 50 (-) Cost 12 15 20 Profit 13 5 30 Variables X1 X2 X3

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